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Advanced Micro Devices Inc. (AMD): Ken Fisher’s Top AI Stock Pick for Explosive Growth

AInvestSunday, Nov 10, 2024 11:54 am ET
2min read

Artificial Intelligence (AI) has emerged as a transformative force in the tech industry, capturing the attention of investors worldwide. Among the many stocks vying for a piece of this lucrative pie, one stands out as a top pick from renowned billionaire investor Ken Fisher: Advanced Micro Devices Inc. (AMD). This article explores AMD's potential as an AI stock pick and its implications for investors seeking explosive growth.
AMD, a semiconductor sector veteran, has been making waves with its aggressive push into the field of artificial intelligence. The company's MI300X data center GPU has gained significant traction, attracting clients like Microsoft and Meta Platforms. Microsoft has broadened its use of MI300X to power multiple Copilot services using GPT-4 models, demonstrating its confidence in AMD's technology. Meta, similarly, has deployed MI300X to bolster its inferencing infrastructure, even relying on it exclusively to serve live traffic for its most demanding LAMA-405B frontier model. This shift reflects the MI300X's superior cost-effectiveness compared to NVIDIA's H100, making it a compelling alternative for tech companies seeking to optimize their AI infrastructure.

AMD's AI strategy goes beyond the data center, extending its reach into the consumer market. The Ryzen AI 300 Series processors, encompassing central processing units (CPUs), neural processing units (NPUs), and graphics processing units (GPUs), empower original equipment manufacturers (OEMs) to integrate AI processing capabilities directly into consumer devices. This move facilitates accelerated user experiences, like real-time language translation, enhanced image processing, and personalized content recommendations. By bringing AI processing closer to the user, AMD is unlocking new possibilities for AI-driven innovation in devices like laptops, tablets, and other smart devices.
AMD's aggressive AI strategy has translated into impressive financial results. In Q3 2024, the company reported record revenue of $6.8 billion, largely driven by the remarkable success of the MI300X GPUs and EPYC processors in the Data Center segment. Key customer wins, including expanded adoption by Microsoft for its Copilot services and Meta Platforms for its LAMA-405B frontier model, drove this extraordinary growth. In the Client segment, revenue also saw a 1% increase year-over-year, demonstrating AMD's broad appeal across various markets.

While AMD's AI prospects are enticing, it's essential to consider the broader investment landscape. The author's core investment values emphasize a focus on sectors that generate stable profits and cash flows, such as utilities, renewable energy, and the REIT sector, over speculative ventures like AI that lack profitability. Income-focused strategies, like the Income Method, are particularly suited for retirement portfolios, as they prioritize consistent, inflation-protected income.
Investors seeking stable income-generating investments may consider funds like the Cohen & Steers Quality Income Realty Fund (RQI), which offers stable yields and potential for capital gains. Diversification is key, and funds like the XAI Octagon Floating Rate & Alternative Income Trust (XFLT) and REITs like AWP and GOOD provide adaptability in changing market conditions. Additionally, reliable income-generating investments, such as Scotiabank, offer high dividends and are supported by strong institutional stability.
In conclusion, AMD's aggressive push into AI, led by the MI300X GPU, has secured market share by attracting major tech players like Microsoft and Meta. In Q3 2024, AMD's Data Center revenue surged 122% year-over-year to $3.5 billion, driven by MI300X adoption. This growth indicates AMD's ability to capture market share in the AI chip sector, translating into significant revenue growth. However, investors should also consider income-focused strategies and diversify their portfolios to ensure long-term stability and steady returns.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.