White Falcon Capital Management slashes 75% AMD stake on valuation concerns

White Falcon Capital Management has sold approximately 75% of its Advanced Micro Devices (AMD) position, according to the firm’s second-quarter 2026 investor letter. The divestment follows a substantial appreciation in the semiconductor maker’s share price, which the fund manager attributed to valuation concerns and a strategic reallocation towards other artificial intelligence stocks perceived to offer greater upside potential with less downside risk.

The decision was not driven by a deterioration in AMD’s business fundamentals. Instead, White Falcon highlighted that the sale was a disciplined response to the stock’s significant price increase from an initial purchase price of approximately $80 per share in October 2022 to a closing price of $552.33 per share on July 22, 2026. The firm noted that AMD’s core CPU products are now in demand for Agentic AI applications, validating the long-term thesis behind the original investment.

White Falcon Capital Management stated that while the upside captured was not the result of predicting AI’s trajectory, the current trading price reflects a very optimistic consensus about the company's future. The fund manager emphasized that forecasting such trajectories is not their strength, and they prefer to maintain patience and discipline in capital allocation. They believe that high-quality businesses possess optionality that is often undervalued, even as they trade at higher multiples.

The fund’s portfolio returned 8.5% in the second quarter of 2026, trailing major indices including the S&P 500 TR (CAD) at 17.3%, the MSCI AC TR (CAD) at 16.4%, and the S&P TSX TR at 6.9%. Year-to-date returns stood at 1.8%, also trailing these benchmarks. The firm expressed being underwhelmed by the quarterly performance but stressed its focus on achieving positive absolute returns adjusted for risk over a complete market cycle, rather than chasing short-term momentum.

AMD ranked 20th on the list of 40 Most Popular Stocks Among Hedge Funds heading into 2026. Data indicates that 134 hedge fund portfolios held AMD at the end of the first quarter of 2026, an increase from 132 in the previous quarter. The semiconductor company posted a one-month return of 0.99% and gained 231.77% over the past 52 weeks, reflecting a market capitalisation of $900.63 billion as of late July.

White Falcon Capital Management concluded that the same dynamic applies to many of its current holdings. The firm continues to seek fundamentally strong businesses operating in attractive sectors, led by capable management teams, and available at reasonable valuations. The reduction in AMD reflects a broader strategy to rotate capital into opportunities where the risk-reward profile is more favourable given current market pricing.