Advanced Micro Devices (AMD) isn’t a household name for many people, but that doesn’t mean the company hasn’t has a massive impact on the daily lives of billions of people around the world. AMD is the second-largest supplier of microprocessor in the world, behind only Intel (INTC) in terms of market reach, and today is produces a wide range of microprocessor chips (for computers as well as mobile devices), motherboard chipsets, embedded processors and graphics processors for services, workstations, personal computers, mobile devices and more.

It’s also active in the market for graphics processes after acquiring ATI in 2006. Today it is number-two in graphics process unit sales after only Nvidia (NVDA). In 2018, AMD’s revenue was $6.48 billion and its market cap was about $45 billion. 

Rationale

All that said, there are reasons for investors to think twice about investing directly in AMD. The most direct way to gain exposure to Advanced Micro Devices is to buy its listed shares, of course, but its participation in the extremely competitive computer hardware market might make many reconsider that approach. Companies like AMD must constantly innovate and find new ways to drive revenue as both technologies and consumer needs change and evolve. This can be extremely lucrative for those can stay ahead of the trends, but those fortunes can change quickly when a new technology or need is overlooked or claimed by a competitor. What’s more, as the number-two competitor in both of its primary markets – microprocessors (behind Intel) and graphics processing units (behind Nvidia) – Advanced Micro Devices is at the mercy of its larger competitors and is often forced to compete on price rather than its own innovations. 

However, for investors interested in gaining exposure to the microprocessing sector, rather than buying AMD shares themselves should consider buying funds that provide exposure to Advanced Micro Devices and other similar firms. After all, the return drivers that will benefit AMD might also benefit other similar tech firms. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like Advanced Micro Devices through these types of funds. 

Investing in AMD 

A search on Magnifi suggests that investors can gain access to AMD via a number of different funds and ETFs, including those shown below. 

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