- Make Investing Normal
- Posts
- AI's Ugly Duckling 🦆💔
AI's Ugly Duckling 🦆💔
PLUS: The Next Mag7 ✨
In partnership with
Gainers📈 & Losers📉
Our Biggest Gainers & Losers of the Day in the $100,000 Build Portfolio
For the 8th January 2024:
AI's Ugly Duckling 🦆💔
The Next Mag7 ✨
Early Investor for Healthcare 🧑⚕️
AI's Ugly Duckling 🦆💔
Not everyone can be the golden child. Someone’s got to be the runt of the litter. The one that walk’s with a waddle & looks a bit funny.
For the AI revolution it looks like it’s AMD. But you remember how those stories end right?
Down 4.5% today caused by a downgrade rating from HSBC
The ugly duckling turns into the best looking swan & everyone regrets being so mean. I think people will feel the same if they’re not holding AMD stock.
Why are they down nearly 5% today? Is it still a good buy? Let’s take a closer look.
The Downgrade Deets 🔍
A rating downgrade caused the drop.
HSBC analyst Frank Lee cut his rating from Buy to Reduce. Price targets have been cut from $200 to $110. Insane.
But Why? In his words:
“Its AI GPU roadmap is less competitive than we previously thought.”
Translation: Nvidia is still hogging the space in AI GPUs, & we don’t think AMD’s catching up anytime soon.
Here’s what Lee’s note to clients read:
MI325 GPU isn’t it: Demand for AMD’s latest AI GPU is… meh. The issue? Samsung’s struggling to produce higher-spec HBM3e memory, meaning AMD’s MI325 is stuck with lower specs.
Behind the curve: AMD’s MI350 GPU, expected in 2H25, will still lag behind Nvidia’s NVL rack platform. The real competition (the MI400) isn’t expected until late 2025 or early 2026.
Valid points but here’s the thing to remember. Investing is for the long term. AMD’s core business is still performing & current price gives us massive value.
And Frank’s only had a 50% hit rate in the last 12 months so I’m not going to worry too much.
Frank Lee’s stats over the last 12 month
I did a deeper dive into AMD & why it’s such a strong value play just before Christmas that you can read here.
Meanwhile… $20M on Biotech? 🤔
In other news, AMD announced it’s dropping $20M into Absci, a drug discovery company.
AMDs investment in Absci hitting the headlines & boosting Absci stock
Why have they done that?
To use AMD’s AI accelerators & ROCm software to help Absci with… discovering drugs.
Interesting move? Sure. Game changing? Not really. It’s a $20M bet in a $140B+ AI race.
My Plan 🗺️
Nothing much has changed for me. I thought AMD was good value before the drop. I think they’re even better value now thanks to HSBC.
HSBC are in the minority with their drastic cut. Average price target from analysts is somewhere around $180 which is nearly 50% upside from where we are now.
Analysts expectations for AMD stock price
It looks like we’re in for a bumpy ride but I’m going to keep adding to my AMD position. It currently makes up ~0.5% of my portfolio. I feel that’s about right for the risk/reward profile right now.
The Next Mag7 ✨
AI's Next Magnificent Seven
The Man Who Called Nvidia at $1.10 Says "AI's Next Magnificent Seven Could Do It Even Faster."
He says $1,000 in these seven stocks could turn into $1 million+ in less than six years.
He breaks down the seven stocks you should own.
Early Investor for Healthcare 🧑⚕️
200% Revenue Growth: Be Part of Their Global Expansion
This is a paid advertisement for Med-X’s Regulation CF Offering. Please read the offering circular at https://invest.medx-rx.com/
Fast-growing product expanding globally – invest now
200% revenue growth in five years
Entering 41 international markets, major partnerships
What did you think of today's update? |
That’s all! See you same time tomorrow 👋
P.S Hit reply & let me know what you thought of today’s newsletter. All feedback is welcomed ❤️
Reply