Was Jim Cramer Right About Advanced Micro Devices (AMD)?

The question isn’t just about whether a stock went up or down—it’s about whether the reasoning behind the call holds water. Let’s break down advanced micro devices (AMD) through the lens of one of Wall Street’s most vocal voices.

2020: The Bullish Call That Paid Off

Back in 2020, when the markets were reeling from the pandemic sell-off, AMD was one of the names screaming buy. Why? Technical charts told the story.

Ask Aime: Why did Wall Street go nuts for AMD back in 2020?

The stock had cratered 40% from its February peak, hitting lows near $37. But here’s what stood out:
- Technical Setup: An inverse head-and-shoulders pattern (a classic bullish signal) formed on AMD’s chart, signaling a breakout.
- MACD Crossover: The Moving Average Convergence Divergence indicator showed a bullish crossover, confirming momentum.
- Sector Tailwinds: The shift to remote work and gaming fueled demand for AMD’s chips in data centers and PCs.

Ask Aime: "Why did AMD surge during the pandemic sell-off?"

By mid-2020, Action Alert! calls to “buy on dips” delivered results. A “buy on a pullback” in May 2020 returned +8.91%, while a “hold” recommendation in June 2020 turned into a +13.27% gain by early 2021.

The 2024 Letdown: When the Chips Didn’t Stack Up

Fast-forward to 2024, and optimism turned to frustration. A May 2024 call for AMD’s role in AI was overshadowed by a 31.3% collapse by April 2025. What went wrong?

• Earnings Miss: AMD delivered a “weak quarter” with conservative guidance, spooking investors.
• Supply Constraints: Even as AI demand surged, production bottlenecks limited the company’s ability to capitalize.
• Sector Headwinds: The broader AI sector stumbled, with stocks like AMD falling as investors rotated into rate-sensitive sectors.

Q2 2025: A Glimmer of Hope?

Then came the Q2 earnings report—a reminder that AMD isn’t going anywhere. On a Tuesday evening, AMD announced unrelenting demand for its MI300 AI chips, pushing shares +5% the next day. Key takeaways:
- Supply Still Tight: AMD can’t keep up with demand. The MI300 is its fastest-ramping product ever, but factories can’t outpace orders.
- AI’s Growth Machine: Microsoft’s $20 billion AI spending spree (reported in Q2) indirectly supercharged AMD’s sales. Tech titans like this are betting big on AMD’s chips.

The Bottom Line: A Mixed Bag, But the Bull Case Still Stands

So, was the call right? Let’s tally the scorecard:
- 2020-2021: YES. Technicals, sector tailwinds, and execution delivered.
- 2024-2025: NO. Overconfidence in short-term AI hype led to a stumble.
- Q2 2025 and Beyond: Bullish Again. AMD’s role in AI infrastructure is unshakable.

The numbers back this:
- 96 hedge funds held AMD as of Q4 2024 (per Insider Monkey), showing institutional faith.
- The Inverse Cramer Strategy (shorting his top picks) returned 18.3% since 2021—but AMD’s Q2 bounce proves the naysayers can’t stay negative forever.

Final Verdict:
Jim Cramer’s AMD call was right in the long run, but wrong in the short term. The company’s dominance in AI chips and data centers remains intact. For investors, this is a buy-and-hold name—just brace for volatility.

Bottom Line: AMD isn’t just a chipmaker—it’s a pillar of the AI revolution. Even with bumps along the road, the future is bright. Stay long-term focused here.