Top 10 Mega-Cap Stocks to Buy According to Hedge Funds

5. Advanced Micro Devices Inc. (NASDAQ:AMD)

Average Analyst Upside: 19.15%

Number of Hedge Fund Holders: 113

Market Cap: $261.03 billion

Advanced Micro Devices Inc. (NASDAQ:AMD) is one of the top 10 mega-cap stocks to buy according to hedge funds. On August 26, Truist analyst William Stein upgraded Advanced Micro Devices Inc. (NASDAQ:AMD) from Hold to Buy and raised the price target from $173 to $213. As of September 3, the stock was trading at $161.52, which means the new price target implies an upside of 31.87%.

According to the analyst, customers are finally starting to take AMD seriously. Instead of just being a backup option or a bargaining chip against Nvidia, AMD is now being considered for some pretty large AI projects.

Stein argued that AMD’s situation today is a lot like when it first started gaining traction in the server chip space. Back then, it had less than 1% of the market until the launch of its “Rome” chips, which helped it grab a bigger slice as Intel ran into issues.

Looking ahead, the analyst thinks AMD could eventually grab about 10% of the burgeoning GPU market, compared to the current 6%. He’s also raised his earnings forecast and now sees AMD earning $7.89 per share by 2027. To put that in context, the current year EPS estimates stand at $3.85 per share. Stein expects that to more than double in two years as the company is expected to grow its revenue as well as expand margins. A big part of that confidence comes from AMD’s new MI355 chip, which he expects will play a major role in the company’s growth moving forward.