What are the implications of recent tariff hikes on the stock performance of AI companies? How does Advanced Micro Devices, Inc. (NASDAQ:AMD) compare to other AI stocks favored by billionaires? What factors are affecting billionaire investors’ confidence in the AI sector? What insights does Morgan Stanley provide regarding hedge fund leverage and market positioning? Are there specific AI stocks that are seen as more promising than AMD in terms of growth potential?
We recently published a list of 30 Best AI Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against other best AI stocks to buy according to billionaires.
The optimism around the United States economy over the past few months, largely due to the AI hype, has been dampened by recent measures undertaken by the Trump administration to shore up US manufacturing. These measures, largely in the form of obscene tariffs on goods imported into the US from overseas, with a particular focus on China, have hit global stocks, resulting in a downward spiral for major indexes. The latest tariff hike has wiped trillions in market capitalization from the Magnificent Seven, a group of seven firms that dominate the benchmark US indexes and are heavily invested in AI. Latest reports from market research firm IDC indicate that if the tariffs stay in place, they are expected to trigger supply chain disruptions and inflationary challenges across various markets, including the IT sector. According to a report from news agency Reuters, global hedge funds, dominated by billionaires, scaled back their risky bets and sought safety before Trump introduced new tariffs last week.
This report was based on data gathered by investment bank Goldman Sachs. Per the data, hedge funds pulled out of bets in emerging markets of Europe and Asia ahead of the announcement of new tariffs. Research by investment bank Morgan Stanley, as seen by Reuters, also echoes these sentiments. Morgan Stanley estimates US long-short funds net leverage quickly fell to 37%, just shy of historical lows, by the end of last week, from over 50% at the beginning of the year. Net leverage measures the difference between a fund’s long and short positions against the value of what it owns including borrowings. JPMorgan also noted in a recent report that the net leverage of hedge funds has dropped to around the lowest since late 2023. The lower the net leverage, the more conservative a hedge fund’s position. Investors expect significant volatility on risk assets in the near term given the tariff uncertainties and suggest a continued risk-off stance.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
The latest developments represent a reversal of positions from billionaires who, in the past few months, have often hailed AI as the next transformative technology that would shape the future of economies, industries, and society. Influential billionaires repeatedly advocated for investing heavily in AI for the immense economic value it promised. This bullish thesis was based on research from firms like McKinsey that predicted that AI could add up to $4.4 trillion annually to the global economy in the coming years. For investors, this translated into a chance to own stakes in technologies that could underpin the next generation of global growth. For billionaire investors, AI also represented both a diversification strategy and a chance to influence the direction of a powerful new technology. These investors often take strategic stakes that allow them to shape product development and scaling. Some of the biggest companies these investors made huge bets on are discussed in detail below.
For this article, we consulted an internal database on AI companies. From these, we selected the thirty stocks with the highest number of billionaire investors. These stocks are also popular among hedge funds. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
AMD (AMD) Projects Double-Digit Growth on AI-Driven $26B Revenue
Number of Hedge Fund Holders: 96
Number of Billionaire Investors: 18
Value of Billionaire Holdings: $5 Billion
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. The company is heavily invested in the AI boom, with more than 50% of annual revenue coming from the data center portfolio. After posting record annual revenue of close to $26 billion in 2024, the firm expects Q1 2025 revenue of approximately $7.1 billion, slightly down sequentially but up 30% year-over-year, driven by strong growth in the data center and client businesses. The company also anticipates double-digit revenue and EPS growth for 2025, driven by continued momentum in the data center GPU and CPU businesses. Investment advisory KeyBanc recently downgraded the stock to Sector Weight from Overweight, citing concerns about the sustainability of its China AI business.
Overall, AMD ranks 11th on our list of best AI stocks to buy according to billionaires. While we acknowledge the potential of these AI companies, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
AMD Projects Double-Digit Growth on AI-Driven $26B Revenue
Advanced Micro Devices (AMD), the renowned semiconductor company, has set a formidable target for itself, forecasting an impressive $26 billion in revenue backed by double-digit growth powered by innovations in artificial intelligence (AI) and high-performance computing. AMD’s strategy hinges on an evolving technological landscape where AI and machine learning are rapidly becoming essential components of computing, and the company’s adeptness at leveraging these advancements is pivotal to its growth trajectory.
The AI Revolution and Semiconductor Demand
In recent years, the proliferation of AI applications across various sectors has led to an unprecedented demand for advanced semiconductor technologies. From cloud computing to edge devices, AI’s requirement for high-performance GPUs and CPUs has created a lucrative market ripe for companies positioned to supply these components. AMD has recognized this shift and is capitalizing on it through an aggressive investment strategy that prioritizes research and development in AI.
The adoption of AI technologies has been incredibly rapid, with industries deploying AI-powered solutions to enhance efficiency, improve data analysis, and leverage automation. This burgeoning demand underscores the need for powerful chipsets capable of handling complex algorithms and massive datasets. AMD’s commitment to delivering next-generation processors, such as its EPYC server line and the ROCm platform for GPU computing, has solidified its footprint in this market.
AMD’s AI-Driven Strategy
AMD’s project for $26 billion in revenue isn’t just a numerical goal; it reflects a strategic vision molded around AI innovations. The company has positioned itself as a credible alternative to competitors like NVIDIA, particularly in the realm of AI and machine learning. The past year has seen AMD ramping up its capabilities with the launch of advanced products that cater specifically to the needs of AI workloads.
One of the key drivers of this growth is AMD’s emphasis on enhancing its GPU technology. The Company’s MI250 and MI300 series are designed to deliver high performance for AI training and inference, simplifying the deployment of AI models in various applications. By offering systems that are not only powerful but also energy-efficient, AMD meets the demands of companies looking to optimize their AI infrastructure.
Moreover, AMD is keenly aware of the competitive landscape and its role in contributing to the ecosystem. Partnerships with major tech companies such as Microsoft and Google have fostered collaboration and integration of its hardware with advanced AI platforms, providing AMD with a foothold in hybrid cloud environments. As businesses increasingly migrate to cloud-based solutions, AMD’s revenue potential associated with these partnerships grows exponentially.
Financial Projections and Market Sentiment
AMD’s projected revenue growth paints a bright future for the company, reflecting strong confidence in its strategic direction and product offerings. Analysts foresee double-digit growth for AMD in the coming years as the company taps into the vast potential of the AI market. This sentiment is echoed in AMD’s recent earnings estimates, which show a healthy uptick in revenue driven by its AI initiatives and solidified market position.
Moreover, AMD’s ability to maintain competitive pricing while offering superior technology will likely bolster its profitability. The synergy between AMD’s research in AI and its existing portfolio positions it to not only capture but also expand market share in key growing segments.
Investors are taking notice of this momentum. AMD’s stock performance has been buoyant, reflecting optimism about the company’s prospects. As businesses ramp up their investments in AI and high-performance computing, AMD is well-equipped to fulfill this need, placing it competitively against its rivals. The ongoing evolution in tech provides AMD with the opportunity to innovate and expand further.
Challenges and Future Considerations
Despite the bullish outlook for AMD’s revenue, the company faces challenges that could influence its growth trajectory. The semiconductor industry is known for its volatility and cyclical nature. Fluctuating demand in the consumer electronics market or disruptions in the supply chain can pose risks. Furthermore, AMD must continue to differentiate itself amid fierce competition from tech giants. Continuous innovation, effective marketing strategies, and responsiveness to market trends will be crucial in navigating this landscape.
Additionally, as AI technologies evolve, AMD will need to remain agile in adapting its products to meet emerging requirements while keeping pace with rapid advances in computation needs. The company’s commitment to maintaining a robust R&D department is essential to sustaining its innovation pipeline and competitive advantage.
Conclusion
In conclusion, AMD’s projection to achieve $26 billion in revenue driven by double-digit growth illustrates the company’s strategic alignment with the burgeoning AI-driven market. With an emphasis on new technologies and strategic partnerships, AMD is emerging as a key player in the semiconductor industry. If the company can navigate the challenges ahead effectively, it stands to redefine its standing in the tech world and achieve lasting success in a rapidly evolving landscape. As AI continues to reshape industries, AMD appears poised to leverage its technological advancements and remain at the forefront of this transformational wave.
AMD is poised for significant growth, driven by advancements in artificial intelligence and a robust revenue forecast of $26 billion. The company’s strategic investments in AI technologies are expected to enhance its product offerings and market position. By leveraging AI, AMD aims to capitalize on increasing demand for high-performance computing solutions across various sectors. This trajectory suggests that AMD’s growth is not only sustainable but also reflects the company’s commitment to innovation in a rapidly evolving technological landscape. As it continues to expand its capabilities, AMD is likely to attract more customers and strengthen its competitive edge in the semiconductor industry.