Advanced Micro Devices’ (AMD) Returns Validate the Investment Thesis

Advanced Micro Devices’ (AMD) Returns Validate the Investment Thesis Soumya Eswaran Thu, July 23, 2026 at 5:34 PM GMT+2 4 min read AMD White Falcon Capital Management, an investment fund manager, released its second-quarter 2026 investor letter. A copy can be downloaded here . The portfolio delivered 8.

5% in Q2 2026, trailing the S&P 500 TR's (CAD) 17. 3%, MSCI AC TR's (CAD) 16. 4%, and the S&P TSX TR's 6.

9% returns. The YTD's 1. 8% return also trailed the indices.

The firm is underwhelmed by the portfolio's performance in the quarter; however, the firm emphasizes long-term performance over short-term results. The firm aims to achieve positive absolute returns adjusted for risk over a complete market cycle. The underperformance is not due to the business fundamentals but the momentum-driven rallies in AI-linked stocks.

The firm maintains patience and discipline in capital allocation, with valuation as crucial for long-term returns. In addition, please check the Strategy's top five holdings to know its best picks in 2026. In its Q2 2026 investor letter, White Falcon Capital Management highlighted Advanced Micro Devices, Inc.

(NASDAQ: AMD ). Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company that designs and manufactures of AI accelerators, microprocessors, and graphics processing units.

 On July 22, 2026, Advanced Micro Devices, Inc. (NASDAQ:AMD) closed at $552. 33 per share, reflecting a market capitalization of $900.

63 billion. Advanced Micro Devices, Inc. (NASDAQ:AMD) posted a one-month return of 0.

99%, while its shares gained 231. 77% over the past 52 weeks. White Falcon Capital Management stated the following regarding Advanced Micro Devices, Inc.

(NASDAQ:AMD) in its Q2 2026 investor update: "Before we do that, let's talk about Advanced Micro Devices, Inc. (NASDAQ:AMD). We purchased our initial position in AMD in October 2022 at about $80 per share when the stock was depressed due to weak outlook for its end markets.

As is often the case with the market, when it does not like a stock or a sector it discounts it severely and we were able to purchase a cyclical stock (yes, semiconductor stocks were cyclical then! ) with a net-cash balance sheet at a depressed multiple of depressed earnings. Our investment was underpinned by our confidence in AMD's management team, its engineering culture, and its ability to consistently deliver competitive products.

It turns out that CPU's, AMD's core product, are needed for Agentic AI! The stock took off earlier this year and is currently trading at above $500 per share. From our perspective, the upside we captured was not due to any attempt to predict AI's trajectory, but simply the result of owning a quality company in a secularly growing sector, run by a strong management team at a sensible valuation.

As we've said before, high-quality businesses possess optionality that simply isn't available to mediocre businesses and even as these businesses trade at higher multiples, this optionality is often undervalued. Today, the world can't seem to buy enough semiconductor stocks, and AMD trades at a valuation that reflects a very optimistic consensus about its future. While those expectations may well prove accurate, forecasting that kind of trajectory is not our strength.

For that reason, we've sold roughly three‑quarters of our AMD position. The same dynamic applies to many of our current holdings. Like AMD in October 2022, these are fundamentally strong businesses operating in attractive sectors, led by capable management teams, and because of one reason or another, available at reasonable valuations.

" Story Continues Is Advanced Micro Devices (AMD) One of the Top 10 Dividend Stocks to Buy According to Reddit? Advanced Micro Devices, Inc. (NASDAQ:AMD) ranks 20 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 .

According to our database, 134 hedge fund portfolios held Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of the first quarter, up from 132 in the previous quarter. While we acknowledge the potential of Advanced Micro Devices, Inc.

(NASDAQ:AMD) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . In  another article , we covered Advanced Micro Devices, Inc.

(NASDAQ:AMD) and shared the list of best stocks to buy for high returns. In addition, please check out our hedge fund investor letters Q2 2026  page for more investor letters from hedge funds and other leading investors. READ NEXT:  33 Stocks That Should Double in 3 Years  and  15 Stocks That Will Make You Rich in 10 Years .

Disclosure: None. This article is originally published at Insider Monkey .