This content is not intended as investment advice. The author currently holds no positions in any stocks mentioned.
Contrarian Investment Insights on AMD
If you subscribe to a contrarian investment approach, the situation surrounding AMD shares may pique your interest. The company has been notably underrepresented within the portfolios of Wall Street investors, presenting a compelling opportunity.
Declining Active Ownership of AMD
Recent findings from Bank of America reveal a significant decline in active ownership of AMD among fund managers, dropping to a mere 20% in August 2025. This 3-percentage-point reduction since May represents a staggering drop from the previous year, where 39% of surveyed fund managers maintained active exposure to AMD.
AMD’s Market Positioning
Concurrently, AMD’s representation in the S&P 500 index has diminished, currently standing at 0.16x. This reflects a quarterly decline of 5% and an astonishing 80% decrease year-over-year, marking AMD as the least owned semiconductor stock in this key benchmark.
Stock Performance Despite Ownership Decline
Interestingly, this decline in ownership has occurred alongside a 34% increase in AMD’s stock price year-to-date, outperforming the Philadelphia Semiconductor Index (PHLX).
Growth Projections and Revenue Guidance
AMD continues to project strong growth, recently announcing a revenue target of $8.7 billion for the current quarter. This marks a 14% increase compared to the preceding quarter’s revenue of $7.6 billion.
Financial Challenges and Inventory Charges
It’s important to note that AMD reported a GAAP operating loss in Q2 2025, primarily due to $800 million in inventory and related charges associated with U. S.export control restrictions on the Instinct MI308 products. These charges significantly inflated the company’s cost of goods sold for the quarter, resulting in a 59% year-over-year increase.
Regulatory Changes and New GPU Products
However, positive developments are on the horizon. The easing of stringent export restrictions by the Trump administration now permits AMD to sell its previously difficult-to-market MI308 GPUs at “near-zero cost, ”substantially enhancing overall gross margins for the second half of 2025, according to an analysis by Susquehanna.
Additionally, AMD has launched its MI350 series GPUs, built on the fourth-generation Instinct architecture, with availability expected in Q3 2025. These new GPUs promise impressive advancements, boasting a fourfold increase in AI computing power and a 35-fold enhancement in inferencing capabilities.
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