Advanced Micro Devices (AMD): The Chip Giant Billionaires Can’t Stop Buying

Advanced Micro Devices (AMD) is positioned as a top stock to profit from AI with strong hedge fund support (96 holders)
AMD reported record Q4 2024 revenue of $7.7 billion (24% year-over-year increase) with Data Center segment nearly doubling
The company is classified as an “AI Enabler” developing chips and infrastructure with projected growth rate of 33.76%
AMD stock has a high beta of 1.97, making it more volatile than the broader market and attractive to billionaire investors
18 billionaire investors hold $5.12 billion in AMD stock despite market volatility following new tariffs announced April 2, 2025

Advanced Micro Devices has emerged as a key player in the artificial intelligence revolution. The chipmaker continues to expand its footprint in the high-growth AI sector while navigating recent market turbulence.

AMD reported record revenue of $7.7 billion in the fourth quarter of 2024, marking a 24% increase compared to the same period last year. The company achieved a gross margin of 51%, highlighting its ability to maintain profitability while investing in new technologies.

The semiconductor firm’s Data Center segment has been particularly impressive. Annual revenue in this division nearly doubled, driven by accelerated adoption of EPYC processors and over $5 billion in AMD Instinct accelerator revenue.

For the full year 2024, AMD achieved total revenue of $25.8 billion, representing a 14% increase year-over-year. This growth was heavily influenced by the Data Center segment’s 50% increase.

The company’s Client segment, which includes Ryzen processors, also saw strong performance with a 58% year-over-year increase. This suggests AMD is gaining market share across multiple product lines.

Riding the AI Wave

AMD falls into the category of “AI Enablers” – companies that develop AI models, chips, and cloud infrastructure. This positioning has attracted substantial investor interest as the AI market continues its rapid expansion.

According to industry forecasts, the generative AI market is projected to grow from $40 billion in 2022 to approximately $1.3 trillion by 2032. This represents an enormous growth opportunity for companies like AMD that provide the underlying technology.

The widespread adoption of AI is evident across industries. McKinsey’s 2024 Global AI Survey found that 50% of businesses are now leveraging generative AI capabilities, up from 33% in 2023. Additionally, 72% of companies are deploying AI in at least one business area.

AMD’s innovation pipeline includes Ryzen AI processors optimized for Microsoft’s Copilot AI assistant. These processors could boost growth in the client segment throughout 2025 and beyond.

Wall Street has taken notice of AMD’s potential. Of 55 analysts covering the stock, 69% rate it a “Buy.” The company has a projected growth rate of 33.76% for the coming year.

Billionaire Backing During Market Uncertainty

Despite recent market volatility, AMD has attracted significant investment from billionaire investors. As of Q4 2024, 18 billionaire investors held AMD stock worth a combined $5.12 billion.

The company is also backed by 96 hedge funds, according to Insider Monkey’s Q4 2024 database. This high level of institutional interest suggests strong confidence in AMD’s future performance.

AMD has a beta of 1.97, meaning it is nearly twice as volatile as the broader market. While this makes the stock higher risk, it also offers greater potential rewards – particularly during market recoveries.

The recent tariffs announced by President Donald Trump on April 2, 2025, sent ripples across Wall Street. However, earlier reports that the president might postpone scheduled tariffs on the semiconductor industry temporarily boosted AMD’s stock. On March 25, the company’s shares surged to $113.85, marking a 6.96% increase in a single trading session.

Many billionaire investors view market chaos not as a threat but as an opportunity. Between 1980 and 2023, despite an average intra-year decline of around 14%, the market posted positive annual returns in 32 out of 44 years.

Competing in a Crowded Field

While AMD faces tough competition from Intel and NVIDIA, it has gained significant market share through its Ryzen and EPYC product lines. These products are known for their quality and cost-effectiveness.

The company’s guidance for 2025 anticipates first-quarter revenue of $7.1 billion. This positive outlook comes despite the challenging market conditions and ongoing trade tensions.

AMD’s exceptional earnings per share (EPS) growth of 26.91% and projected EPS growth of 33.09% over the next five years have made it a top high-risk stock according to billionaire investors.

For investors seeking exposure to the AI revolution, AMD represents an established company with strong growth prospects. Its position as an AI Enabler gives it a key role in the ongoing digital transformation across industries.

As AI continues to reshape business operations and market strategies, companies like AMD that provide the fundamental technology are well-positioned to benefit. The semiconductor firm’s recent results demonstrate its ability to capitalize on these trends.

AMD’s stock performance will likely continue to be influenced by broader market conditions, particularly trade policies and semiconductor industry dynamics. However, its strong foundation in AI technologies provides a long-term growth catalyst.

The company’s ability to maintain high margins while investing in future technologies suggests a sustainable business model. This combination of current profitability and future potential has attracted both retail and institutional investors.

For those willing to accept higher volatility, AMD offers exposure to the growing AI market through an established company with proven technology capabilities.