We recently published a list of 10 AI Stocks on Investors’ Radar In January 2025. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against other AI stocks on investors’ radar in January 2025.
Drew Pettit, U.S. equity strategist at Citi Research, said in a latest program on CNBC that he believes the AI growth story is still intact moving ahead in 2025. However, the analyst believes a lot of positive news is already “priced in.” He also mentioned the key areas that can benefit this year.
“I think the fundamental stories, at least for the pick-and-shovels names, continue. But where we think the trade is actually going to broaden out, and honestly, it has since mid-year, is into some of the users of AI. So, think about car companies that do autonomous driving or software companies putting that into their programs themselves, and even to some of the more cyclical names that, on the back end, can get some more productivity gains. So yes, the picks-and-shovels, the enablers of the trade, were attractive for the most part in 2024. We think AI continues to broaden out.”
The analyst said he has done some “reverse DCF work” and believes there are many companies that are mispriced and many that have the good news around them already priced in.
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For this article, we picked 10 AI stocks that analysts are talking about this month. With each company, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up of a complex looking PCB board with several intergrated semiconductor parts.
Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 107
Scott Bauer from Prosper Trading Academy said while talking to Schwab Network that he believes Advanced Micro Devices, Inc. (NASDAQ:AMD) has more upside than downside heading into 2025.
“That’s kind of been tossed aside and you know that’s part of the reason I like it. And you know there has been some pretty positive news lately with their relationship with Nvidia, and it may take Nvidia to get Advanced Micro Devices Inc (NASDAQ:AMD) going again. But just given the fact that it’s really fighting to hold those 52-week lows as we’re seeing here, and it’s putting in a lot of volume down here, I think the upside is way better than the downside is for the entire year.”
Advanced Micro Devices (NASDAQ:AMD) bulls believe the market should stop comparing the company’s chips with Nvidia and focus on its data-center growth and its competitive edge over other players like Intel. Advanced Micro Devices (NASDAQ:AMD)’s strong growth in the data center segment is indeed impressive, driven by Instinct GPU shipments and strong sales of EPYC CPUs. Advanced Micro Devices (NASDAQ:AMD) will continue to benefit from organic growth catalysts in this segment despite the competition from Nvidia. According to Goldman Sachs Research, global data center demand could surge by 160% by 2030. In the U.S., data centers are projected to use 8% of total power by 2030, up from 3% in 2022. McKinsey estimates that adding the required U.S. capacity will need over $500 billion in infrastructure investment by the decade’s end.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2024 investor letter:
“Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) lagged the market after the company reported earnings results that, while generally strong, left the market wanting more. The company reported AI revenue of ~$600 million and increased its forward-looking outlook for AI revenue growth, but shares took a breather, as results missed elevated expectations after the stock’s strong performance. Despite the stock’s underperformance during the quarter, the company’s AI story remains very much intact. The growth outlook for the company is supported by better cloud demand, enterprise recovery and continued share gains ahead of the company’s new AI product launch.”
Overall, AMD ranks 8th on our list of AI stocks on investors’ radar in January 2025. While we acknowledge the potential of AMD, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.