TLDR
- Cathie Wood’s ARK Innovation ETF sold 138,432 AMD shares worth $22.3 million on September 24
- Wood continued building positions in Chinese tech companies Alibaba and Baidu
- AMD faces increased competition as Nvidia invests $5 billion in Intel and $100 billion in OpenAI
- Broadcom received a $10 billion order from a new customer for AI custom chips
- Wall Street maintains Moderate Buy rating on AMD with $187.73 average price target
ARK Invest made major portfolio changes on Wednesday as fund manager Cathie Wood sold millions in AMD stock while increasing her bets on Chinese technology companies. The moves come during a period of intense competition in the semiconductor industry.
Wood’s ARK Innovation ETF sold 138,432 shares of Advanced Micro Devices worth approximately $22.3 million on September 24. The sale represents the fund’s largest single transaction of the day according to daily fund disclosures.
The timing of the AMD sale coincides with growing competitive pressures in the chip sector. Nvidia recently announced a $5 billion investment in Intel, a move that could strengthen AMD’s rival in the processor market.
Nvidia also committed $100 billion to OpenAI, highlighting the massive capital flowing into artificial intelligence infrastructure. This investment could impact demand patterns across the semiconductor industry.
Rising Competition in AI Chips
Broadcom added to competitive concerns by announcing a $10 billion order from an unnamed new customer. The order focuses on AI custom chips, showing strong demand for specialized processors outside of traditional GPU makers.
These developments create a more challenging environment for AMD as it competes for market share. The company has been working to establish itself as a credible alternative to Nvidia in AI processing.
While Wood reduced her AMD position, she continued adding to Chinese technology holdings. The fund increased positions in both Alibaba and Baidu, two major Chinese internet companies.
Alibaba shares gained 8.19% on Wednesday while Baidu rose 5.85%. Both companies have been investing heavily in artificial intelligence and cloud computing services.
Market Outlook for AMD
Wall Street analysts remain cautiously optimistic about AMD’s prospects despite recent challenges. The stock carries a Moderate Buy consensus rating from 34 analysts surveyed.
Twenty-one analysts recommend buying AMD shares while 13 suggest holding the stock. No analysts currently rate the stock as a sell.
The average price target of $187.73 suggests potential upside of about 17% from current levels. This target reflects analyst expectations for the company’s growth prospects.
AMD stock has experienced mixed performance recently, declining 4% over the past month. However, the shares have gained more than 33% year-to-date, outperforming many technology stocks.
The semiconductor company continues to compete with Nvidia for dominance in data center processors and graphics chips. AMD has made progress in server processors but faces stiff competition in AI-focused hardware.
Wood’s decision to trim the AMD position comes as her ARK funds face pressure to generate returns after several challenging years. The fund manager is known for making concentrated bets on disruptive technology companies.
Broadcom announced a $10 billion order from a new customer for AI custom chips on the same day Wood sold her AMD shares.
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