Key Points
As of Aug. 3, Advanced Micro Devices (NASDAQ: AMD) has delivered returns of around 180% over the last year. This occurred as the company became more competitive with market leader Nvidia in the AI accelerator space.
Not surprisingly, those gains have brought much higher valuations, which likely was a factor in Cathie Wood’s Ark Invest selling some of its AMD shares. Despite those sales, longer-term investors probably should not sell, and here’s why.
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Ark Invest and AMD
Admittedly, the pullback might indicate it is a good time to sell for some shareholders. Investors tend to sell the news, and AMD’s recent Advancing AI 2026 event had multiple announcements.
To that end, Ark Invest reduced its AMD holdings in July, and the $11.8 million sale on July 17 is merely a part of the $68.1 million in AMD stock that Ark Invest sold during that month. Investors should remember that Ark Invest is more of an active trader than a buy-and-hold investor, so the moves are also likely a measure of its investment approach.
Aside from the aforementioned gains, it looks like an opportune time to sell if one needs the money or wants to diversify after a massive gain. The stock has traded in a narrow range since May. Moreover, the 160 P/E ratio and arguably its 65 forward P/E ratio may indicate the stock has moved somewhat ahead of its fundamentals.
However, that earnings multiple is probably not high enough to derail AMD’s long-term growth trajectory. The company discussed some of the growth drivers at the event, such as 6th Gen AMD EPYC CPUs, MI400 Series GPUs, and Helios rack solutions, which could make it a big AI winner.
Consequently, AMD estimates its total addressable market to be $2 trillion by 2030. The company reported over $10 billion in revenue in the first quarter of 2026 and nearly $35 billion in 2025, implying it has only realized a tiny portion of its potential growth.
Also, partnerships with the likes of OpenAI, Anthropic, Meta Platforms, and Cisco Systems should help drive that growth. Furthermore, despite its sale, AMD remains Ark Invest’s second-largest position, trailing only Tesla. That strongly indicates that Wood and her team continue to believe in AMD’s future.
Moving forward
Ideally, long-term investors should probably continue to hold AMD despite Ark Invest’s share sale.
Indeed, Ark Invest’s huge AMD stake might have prompted some diversification. Also, AMD’s recent trading range could present an opportunity to reduce one’s stake if needed.
Nonetheless, the most important Ark Invest metric is the fact that AMD remains the firm’s second-largest position across all funds. That is likely because AMD remains on a path to rapid growth, and its $2 trillion addressable market by 2030 indicates considerable growth is to come.
Hence, if one can delay cashing out of the semiconductor stock, they are probably best off not following Ark Invest’s example and instead maintaining their AMD holdings.
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Will Healy has positions in Advanced Micro Devices. The Motley Fool has positions in and recommends Advanced Micro Devices, Cisco Systems, Meta Platforms, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
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