Advanced Micro Devices (AMD) Is Showing Its Advanced Status In The Semiconductor Space

8 Nov 2021 3:20 PM EST

Shares of Advanced Micro Devices (AMD) are surging by more than 11% Monday after the company held its virtual Accelerated Data Center Premiere. At the event, CEO Dr. Lisa Su and her team made several market-moving announcements.

Shares jumped on the news that Meta has become the latest major hyperscale cloud company to adopt AMD’s EPYC CPUs to power its data centers. Meta represents the 10th major hyperscale company to adopt AMD EPYC processors.

We also saw the stock push higher after the company unveiled the AMD Instinct MI200 series accelerators, which they called the world’s fastest accelerator for high performance computing and artificial intelligence workloads.

Lastly, AMD provided new details on the expanded next generation AMD EPYC processors codenamed “Genoa” and “Bergamo”

AMD sometimes gets viewed as a play on the PC market, but this labeling is far from accurate. Today’s announcements once again proves this is one of the premier high-performance computing semiconductor companies to be invested in over the long haul. Their data center business is on fire right now, with revenues more than doubling year over year in the latest quarter. AMD is quickly closing in on Intel's market capitalization.

However, we view this 10% jump today as an opportunity to trim some shares for members who own AMD. This stock has been on a massive run — 45% gain since the beginning of October —  and it would be greedy to not sell any. This is simply our discipline that bulls make money, bears make money, and hogs get slaughtered.

With that said, our portfolio is in an unique position such that we would not be doing any selling for now. We sold half of our position in AMD earlier, as well as realizing gains in multiple portfolio names. Additionally, our short-term swing trading activity (which is separate from investing) has doubled our portfolio in the past 2 months. At the moment, we are actually under-invested, sitting on 31% of cash. We don't like to have that much cash (our desired level is between 5-15% cash), especially as we enter a seasonally strong period of the year (what people usually call Santa-Claus rally). Therefore, we would not sell any shares of AMD.