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AMD Stock Attracts Attention of Hedge Fund Managers

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Mar. 6 2018, Updated 7:30 a.m. ET

AMD’s stock price movement

Advanced Micro Devices’ (AMD) stock price has rebounded in 2018 after falling 9.4% in 2017. Last year, it underperformed the S&P 500 Index (SPX-INDEX), which rose 21.7%, and the VanEck Vectors Semiconductor ETF (SMH), which rose 38.4%.

AMD stock has rebounded, rising 14% since the start of 2018 and outperforming SPX-INDEX and SMH. This rebound has come during a rise in buying activity by hedge funds and other institutional investors.

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Institutional investors and insider trading

In 4Q17, insiders sold $15 million worth of AMD shares, of which senior vice president James Robert Anderson sold shares worth $750,000 and chief accounting officer Darla Smith sold shares worth $204,000.

While insiders sold their AMD stock, several institutional investors bought AMD stock. MetLife Investment Advisors bought $2.6 million worth of AMD shares in 4Q17. Laurel Wealth Advisors and Crestline Management also bought a new stake in AMD for less than $0.5 million.

Hedge fund managers

Balyasny Asset Management’s managing partner, Dmitry Balyasny, was bullish on AMD and Micron Technology (MU) and took a position in these stocks. In 4Q17, Balyasny purchased $10.8 million worth of AMD stock. Balyasny Asset Management manages ~$12.6 billion in hedge fund assets.

Balyasny is bullish on AMD because he believes that its new product momentum will help it gain share in the PC (personal computer) and server markets and boost its earnings.

GLG Partners cofounder Noam Gottesman increased his holdings in AMD to $15.7 million. GLG Partners manages $24.6 billion in hedge fund assets.

Noam Gottesman might be bullish on AMD because he found its new Ryzen Mobile processors compelling. The new processor brings a combination of the Ryzen CPU (central processing unit) and the Vega GPU (graphics processing unit) at price points of just $100 and $170, making gaming affordable for the masses. Moreover, all these product launches come at a time when Intel (INTC) faces hardware design flaws such as Meltdown, which are easy to exploit.

In the competitive CPU market, one’s loss is another’s gain. AMD could gain share from Intel. Hedge funds are bullish on AMD, but investors are not. Next, we’ll see what investors think about AMD.

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