Sign InAMD Stock Shows Clear Growth with Potential Upside - Hold Recommendation
Summary
As of July 14, 2023, Advanced Micro Devices (AMD) is traded on NASDAQ with a last close price of $115.94, displaying clear growth over the year and potential upside based on the stock's intrinsic value, but mixed signals from technical and fundamental analyses suggest caution and classify the stock as a Hold.
Fundamental Analysis
Advanced Micro Devices, Inc., with the ticker AMD, is currently traded on the NASDAQ at a last close price of $115.94 as of July 14, 2023. The company has a significant market cap of 186.71 billion and an outstanding shares volume of roughly 1.61 billion. Despite minor price volatility on July 14, with a low and high of $115.25 and $122.12 respectively, AMD has displayed clear growth over the year with a range between $54.57 and $132.83, implying a robustly positive performance.
The company's Price to Earnings ratio sits at 579.7, a relatively high number indicating investors' expectations for future growth. AMD reported an earnings per share (EPS) of $0.2, depicting moderate profitability. According to the discounted cash flow (DCF) analysis, the stock's intrinsic value is estimated around $119.02, which subtly suggests potential upside compared to the recent closing price.
Reviewing the target prices, AMD's stock has a target high of $225 and a target low of $65, with a target consensus around $114.06 and a target median of $102. These indicators demonstrate that analysts have broad-ranging opinions on the stock's future performance, adding uncertainty to predictions.
In terms of recent news affecting AMD, the potential to supercharge the company's stock performance through AI innovation suggests bullish outcomes. However, there appear to be concerns about a weak PC market that could weigh on AMD's growth in the short term.
Technical Analysis
The Relative Strength Index (RSI14) for AMD currently stands at 64, approaching overbought territory. In other words, this metric warns of potential bearish trends for the stock down the line. Meanwhile, the Moving Average Convergence Divergence (MACD) for the past three months is negative, suggesting some bearish momentum.
The 50-day moving average is $110.89, while the 200-day moving average is significantly lower at $84.46, demonstrating that the stock has been on an upward trend overall. This suggests the potential for the continuation of the upward trend, assuming no significant market changes.
Future Predictions
For the next trading day on July 17, 2023, considering the current technical indicators and recent news, the stock is likely to experience slight volatility with bias towards upward movement due to the positive news around AI innovation. However, given the DCF valuation and the relatively high RSI, caution should be exercised.
For the upcoming week, an upward trend can be expected, in line with the recent trend and bullish market news. However, investors should monitor the market closely due to the high P/E ratio, the approaching earnings announcement in April 2024, and potential adverse effects from the weak PC market.
Final Evaluation
Taking into account AMD's market position, performance, and mixed signals from both technical and fundamental analyses, the stock can currently be classified as a 'Hold'. Investors should monitor ongoing news related to the company and market shifts that may potentially impact the stock. Moreover, while AMD's innovation in AI and its technical trend suggest potential gains, caution should not be sidelined given the high P/E ratio, approaching overbought status and uncertainty in analyst targets. The decision might be different in line with each investor's risk tolerance and their confidence in the company's future growth.
