Sign InSummary
As of November 3, 2023, AMD stock has shown a 4.10% increase, closing at $112.25, with a predicted trading range for the upcoming session between $107.86 and $113.38, despite challenges like underwhelming MI300 guidance and increased competition, analysts suggest a 'Buy' rating with a target consensus price of $123.19.
Introduction:
The stock under analysis is Advanced Micro Devices, Inc. (AMD), a leading name in the global semiconductor market based in the United States. The company specializes in developing computer processors and related technologies for business and consumer markets.
Current Stock Overview:
As of the last trading session on November 3, 2023, AMD had a closing price of $112.25, reflecting a change of $4.42 or a 4.10% increase in the stock price. The company recorded an intraday high and low of $113.38 and $107.86, respectively.
The stock had a year-to-date high and low of $132.83 and $59.80 respectively, with the current price representing a significant recovery from the year's low. On average, AMD has a trading volume of around 56.67 million, while the trading volume in the most recent trading session was slightly higher at 64.90 million shares.
From a technical perspective, AMD's 50-day moving average stands at $103.18, meaning the stock is currently trading above this average. On a longer-term timeframe, the 200-day moving average is $100.30, again indicating that AMD stands above this line as well. Comparatively lower MACD at -0.76 denotes a downward momentum.
AMD's market capitalization is $181.36 billion, indicating a substantial size in the global semiconductor industry.
Fundamental Analysis:
For a comprehensive analysis, a look at AMD's fundamentals is required. The EPS (Earnings Per Share) coming in at $0.11 and an extraordinarily high P/E ratio of 1020.45 signifies investor's sentiments of AMD's potential future growth as the market participants are willing to pay a premium for the shares.
Analyst Ratings and Forecast:
Considering analyst forecasts, the target consensus price for AMD stands at $123.19, while the target high and low prices are $225 and $65 respectively. The consensus among market analysts is a 'Buy' with 25 'buy' ratings and three 'hold' ratings.
Recent News:
AMD's upcoming chip, MI300, has been a topic of recent discussion. However, it's worth noting that the anticipated revenue guidance of $2 billion in 2024 from the MI300 chip is below market expectations. This guidance, considered underwhelming, coupled with competitive pricing and offerings by rival Intel, paints a more challenging environment for AMD in the near term.
Recent news also suggests growing implications of AI, especially in memory chips. AMD continues to fare well in the AI arena, catered toward increasing AI workloads. Additionally, AMD’s Q3 earnings report exceeded Wall Street's expectations, indicating signs of a healthier PC market.
Price Prediction:
Based on the data and news analysis, for the upcoming trading session on November 6, 2023, a range between the recent low ($107.86) and high ($113.38) can be anticipated. Due to cautious sentiment based on the recent news article regarding MI300, there might be a slight pullback.
For the coming week, the stock is likely to oscillate between the support level of $108.04 and the resistance level of $113.23. The stock's predicted movement is dependent on various factors, including market-wide sentiment and any further company or industry-specific news.
Final Evaluation:
Despite challenges due to increased competition and underwhelming MI300 guidance, AMD has multiple growth catalysts, particularly in the AI market, which will continue to demand high capacity memory chips. Although EPS is low, market participants are willing to pay a premium for AMD shares as they expect substantial future growth, justifying a high P/E ratio.
The general consensus among market analysts suggests a 'Buy' which aligns with the views herein despite the potential short-term challenges mediating the enthusiasm. Although Friday’s news about MI300 might set a cautious tone for AMD in the short term, the long-term outlook seems promising.
Therefore, the final evaluation metric based on the above analysis is to Hold for those who have a stake in the stock, while potential investors might find valuable entry points in case of a short-term price depression. The 'hold' suggestion stems from uncertainties in the company’s immediate future and the high P/E ratio. However, potential future growth and current analyst 'buy' ratings also make selling unattractive.
Please note that the stock market is subject to volatility, and one should conduct their research before making any investment decisions.
