Forget Nvidia, ETFs Are Quietly Piling Into AMD — Do They Know Something We Don't?

As Nvidia NVDA remains in the AI spotlight, Advanced Micro Devices Inc.‘s AMD lesser valuation and increasing investor attention are making waves, particularly among smart-beta and innovation-oriented funds.

Here are three non-leveraged ETFs that include AMD:

• ARK Autonomous Technology & Robotics ETF ARKQ: Cathie Wood‘s actively managed fund is doubling down on AMD, with consecutive buys of more than $2.3 million this week. The fund price has returned 33% of value on the past year.

• iShares Semiconductor ETF SOXX: With high concentration in chipmakers, SOXX is still holding a strong AMD allocation, wagering on secular growth in computing and AI infrastructure over the long term. The fund has had a price erosion of about 13% in the past year, but this fund might be a good long-term play: if you look at the price returns over the past 5 years, it is more than 139%.

• VanEck Semiconductor ETF SMH: Another semiconductor ETF heavyweight, SMH has regularly had AMD as one of its top holdings, a testament to faith in the company’s capability to compete on price and performance. The past year has seen relatively flat prices.

Also Read: Chipwrecked: Nvidia’s Export Ban Triggers ETF Meltdown (And One Big Winner)

Since Nivida continues to trade in excess of 20 times last year’s revenues, AMD’s more modest 6x revenue multiple makes a relatively convincing case for portfolio diversification. It ain’t cheap-cheap, but in the chip business today, it’s almost torture to pass up.

Supporting the case for AMD is a bullish trend in the options market. On Thursday, Benzinga’s options scanner caught a string of long-expiry call options on AMD — the traditional game played by institutions as a play for medium- to long-term conviction.

Debit trades in this fashion don’t pay until and unless the stock reaches targets by expiration time, implying the speculators are not only positive but willing to put actual capital on it.

But optimism is asterisked. The U.S. government’s restrictions on AI chip exports to China, a key market, have placed a policy-induced cloud over the entire semiconductor industry.

Although former President Donald Trump has suggested a more relaxed approach, negotiations are tenuous. For AMD, that translates to surfing waves of hope and uncertainty in equal proportions.

But that hasn’t deterred contrarians or ETFs such as ARKQ from increasing their exposure. It is apparent now that AMD might not be the loudest name in the chip game, but it’s turning out to be one of the cleverest bets — and ETFs are taking notice.

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