We recently compiled a list of 20 trending AI stocks with latest news and valuations. In this article, we’ll take a look at how Advanced Micro Devices, Inc. (NASDAQ:AMD) stands compared to other trending AI stocks.
S&P 500 to reach 6,000 by year-end amid AI boom and revenue growth
Sanctuary Wealth’s Mary Ann Bartels, who appears on CNBC’s Squawk Box to discuss the latest market trends, remains bullish on 2024, predicting the S&P 500 will reach 6,000 by year-end. I am doing it. The chief investment strategist believes the market will remain elevated heading into November and December as the Federal Reserve recalibrates toward easy monetary policy and corporate profits continue to grow.
As of today, the S&P is about 3% away from hitting 6,000. This was just eight months after the number of visitors exceeded 5,000 for the first time. Monday, October 14th marked a new record for the S&P, marking the second anniversary of the bull market. The milestone represents a remarkable rebound over the past two years, when stocks soared despite continued recession fears and rising interest rates.
The S&P 500 Index’s new all-time high came amid optimism on Wall Street as the third-quarter earnings season began. Corporate profits have shown resilience amid high interest rates and moderate inflation, and investors are rushing into stocks that stand to benefit most from the generative AI craze. – Market sentiment remains bullish as traders expect strong financial results and continued growth in technology-driven sectors.
Artificial intelligence stocks are leading the rise in the S&P 500 and Nasdaq. On October 14, the S&P 500 and Dow Jones Industrial Average both hit record highs, declining 0.8% and 0.5%, respectively. Meanwhile, the Nasdaq rose 1%, nearing its own record. Despite this recent rally, high valuations appear to pose a challenge to continued growth, with analysts pointing out that this could be a sign that the bull market is nearing an end. are.
To learn more about these trends, visit Goldman Sachs’ 10 Unsexy AI Stocks and Goldman Sachs’ 10 Hottest AI Stocks.
Strategists also cautioned that continued gains will depend on identifying sectors with strong earnings growth. As artificial intelligence is poised to have a major impact on future market performance, the focus shifts to its impact on profitability across various industries. For AI to continue to drive market growth, “more companies need to realize the promise of AI through margin and profitability metrics,” said Scott Kronert, equity strategist at Citi. .
At the same time, it is also true that the ongoing conflict in the Middle East, the upcoming US presidential election, and natural disasters could pose risks to market upside. Nevertheless, ongoing AI innovations and a resilient economy support further gains. With this in mind, Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, further commented on how third-quarter results will catalyze a market rally as investors focus on technology fundamentals and AI. It points out that there is a possibility that it will work.
“We continue to expect higher volatility in tech stocks in the near term. However, we remain positive on the outlook for the tech sector and artificial intelligence (AI). Against this backdrop, volatility should continue to rise. ” states the note. Leveraged to build long-term AI exposure. ”
The bank said October was a good month for tech stocks, citing that the Nasdaq 100’s monthly realized volatility over the past 40 years was 26% in October, compared to an average of 22% for other months. It was a historically tumultuous month. Either way, AI’s strong fundamentals and upcoming earnings season should reaffirm its positive growth trajectory.
Furthermore, it is stated that the overall AI semiconductor industry is expected to grow rapidly and reach $168 billion by the end of the year. Tech and AI companies are also expected to “beat and raise” expectations for the September quarter. Additionally, the continued shift to smaller and more powerful AI chips will significantly improve performance and encourage further investment in this area.
To learn more about these developments, visit BlackRock’s 30 Most Important AI Stocks and Beyond the Tech Giants: 35 Non-Technology AI Opportunities.
our methodology
In this article, we selected AI stocks by examining news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
A close-up of a complex-looking PCB board with several integrated semiconductor components.
Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of hedge fund holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is an American multinational semiconductor company with operations around the world. The company is driving hardware innovation to support advanced next-generation applications and positioning itself as a leading AI-powered personal computer (AIPC) company. By integrating technologies across CPU, GPU, and NPU, we strive to build a powerful ecosystem that supports the development of powerful AI applications.
AMD held the Advancing AI 2024 event on October 10, 2024. At the AI event in San Francisco, AMD announced its latest AI data center processors and new PC and server chips. Notably, the MI325X chip, built on the same architecture as MI300X, incorporates new memory variants designed to speed up AI-related tasks. Vendors like Super Micro Computers (NASDAQ: SMCI) plan to start shipping AMD’s new AI chips to customers in the first quarter of 2025. AMD aims to use this chip to compete with Nvidia’s Blackwell AI chip. AMD is also planning to launch the next generation MI2350 chip, which is more powerful than the MI325 series chips.
Nevertheless, the stock ended the day down 4% following the AI event. According to analysts at Bernstein Research, the company’s GPUs face “zero challenge” to Nvidia’s upcoming Blackwell chips.
“Even the company’s MI350X teaser, which on paper shows raw performance on par with Blackwell, will arrive in a year’s time, just in time to compete with Nvidia’s next product. Hence, AMD’s accelerated roadmap. I don’t think even that will close the competitive gap.”
– Analyst at Bernstein Research.
Vivek Arya, a research analyst at Bank of America Securities, added that there is “no catalyst for a near-term shift in dynamics” between the company and its semiconductor rivals.
“Training performance appears to be a year behind Blackwell (on par with H200), while inference is only marginally better.”
-Vivek Arya
Meanwhile, Jefferies and Bank of America maintained buy ratings with price targets of $190 and $180, respectively, as of Friday (October 11), as tracked by Visible Alpha. 13 out of 17 analysts also rate the stock as a “buy.” ”, the consensus target is $192.13.
In other news, the US is considering restricting exports of AI chips from both Nvidia and AMD on a country-by-country basis. The move will limit some countries’ artificial intelligence capabilities. Officials are paying particular attention to the Persian Gulf states, and interest in the policy has increased recently, although discussions are still in an early and fluid stage. Commerce Department officials introduced these regulations last month, and more are expected in the future.
AMD ranks #5 overall on our list of trending AI stocks with latest news and ratings. While we acknowledge AMD’s potential as an investment, we believe some AI stocks are more likely to deliver higher returns and do so in a shorter time frame. If you’re looking for AI stocks with more promise than AMD, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: $30 trillion opportunity: 15 humanoid robot stocks to buy, according to Morgan Stanley and Jim Cramer, says NVIDIA has ‘become a wasteland.’
Disclosure: None. This article was originally published on Insider Monkey.
