We recently compiled a list of the 12 High Flying AI Stocks This Week. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against the other high flying AI stocks.

In the artificial intelligence world, the spotlight will be shifting to France next week as the world awaits the US and China to find common ground over the safe development of artificial intelligence. Judging by the measured response from China over the tariffs issue, there is a chance it might. That noted, a wide variety of countries are going to be attending an AI Action Summit in Paris next week to discuss how to put the technology to work. France is going to be hosting the summit alongside India on Feb 10 and 11, focusing on areas such as open-source systems and clean energy for powering data centers, Reuters reported.

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Meanwhile, the emergence of DeepSeek is increasingly turning into a game-changing event for AI development in China. The founder, Liang Wenfeng, is being hailed as a national hero. Indeed, his efforts have greatly helped the country to catch up with the US in the race toward AI supremacy. Chinese companies are increasingly rushing to support AI models coming from DeepSeek. Moore Threads and Hygon Information Technology, for instance, said on Monday that their computing clusters and accelerators will be able to support Deep Seek’s R1 and V3 models. Moore Threads, in particular, stated that progress by DeepSeek’s models using domestically made GPUs could set China's AI industry “on fire”.

While many of the companies in China are rushing to adopt DeepSeek, yet many others are pushing their own AI models forward. Alibaba Cloud released Qwen 2.5-Max just after DeepSeek over the holidays, Beijing-based start-up Zhipu is also in the AI race with its AI assistant app released in October, Chinese start-up Moonshot AI released its own LLM the day DeepSeek released its r1 model, and more. These moves by Chinese companies, and the broader market reaction in the US after the emergence of DeepSeek, reflect on how grave the impact has been on the AI world.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A close up of a complex looking PCB board with several intergrated semiconductor parts.

Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 107

Advanced Micro Devices, Inc. (NASDAQ:AMD) develops semiconductors, providing processors and graphics technologies for gaming, data centers, and AI-driven high-performance computing. On February 5^th, analyst Amanda Tan from DBS maintained a “Buy” rating on the stock and a $200.00 price target following the company’s earnings report on the previous day. While the company reported quarterly results and revenue outlook above analyst estimates, it missed AI chip-related revenue with investors scrutinizing its results against Nvidia. Fourth-quarter data center revenue, a proxy for AMD’s AI revenue, was $3.9 billion, compared to the consensus estimate of $4.15 billion. Regardless, Tan’s rating signifies AMD’s potential for growth and market leadership.

In particular, its expanding market share in the data center accelerator space is expected to reach an addressable market of USD 400 billion driven by AI demand. The company’s roadmap, including the release of the MI325X accelerator in 2024 and subsequent series in the coming years, will help it stay competitive. AMD’s strategic positioning in the AI market is a multi-billion dollar opportunity. Moreover, its data center segment is anticipated to grow at a compounded annual growth rate of 47% from FY23 to FY27 on the back of rising demand for data center GPUs. Finally, market share gains, synergies from acquisitions like Xilinx, and a clear execution roadmap, further help AMD focus on revenue growth and margin expansion. Overall, the firm is bullish on AMD despite PC market challenges and competition from tech firms such as Nvidia and Intel.

Overall AMD ranks 5th on our list of the high flying AI stocks this week. While we acknowledge the potential of AMD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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 the cheapest AI stock.

 

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Disclosure: None. This article is originally published at Insider Monkey.