Sign InAMD Stock Technical Analysis: Bullish Trend Continues with Potential to Test $170 Level
Summary
As of July 02, 2024, Advanced Micro Devices, Inc.
Technical Analysis
Advanced Micro Devices, Inc. (AMD) closed at $164.31 on July 02, 2024, marking a 4.20% increase from the previous close. The stock traded between $156.70 and $164.57 for the day. The volume of 55.80 million shares traded exceeded the average volume of 52.20 million shares, indicating heightened investor interest.
The Relative Strength Index (RSI14) is at 58, suggesting that the stock is neither overbought nor oversold. The stock price is above both the 50-day and 200-day moving averages of $158.79 and $147.92, respectively, confirming a bullish trend. The MACD value is at -2.51, which might typically signal bearish momentum; however, given the recent price activities, it is worth seeing if this trend persists.
Near-term technical indicators exhibit immediate support at $161.78 and resistance at $164.47. The Average True Range (ATR) of 3.84 suggests moderate volatility. A close above the resistance level could see the stock testing the $170 level, while failure to hold support might push it back toward the $155 range.
Fundamental Analysis
AMD boasts a market capitalization of $265.58 billion, reflecting its substantial footprint in the semiconductor industry. The stock has exhibited a 13% gain in 2024 so far, lagging behind peers like Nvidia and Qualcomm. Despite this, AMD's association with AI and 5G markets presents an optimistic growth outlook.
The firm's EPS stands at 0.69, resulting in a lofty P/E ratio of 238.13. This high P/E ratio suggests that the stock may be overvalued relative to its earnings. However, the impressive earnings announcement scheduled for August 06, 2024, could alter this perception if AMD reports above-expectations results.
The consensus analyst target is $162.25, with targets ranging from $65 to $270. Of the analysts covering the stock, 26 rate it as a 'Buy', 5 as a 'Hold', and 1 as 'Sell'. This consensus leans towards a positive long-term outlook.
Investors should monitor upcoming earnings and the broader AI and semiconductor market sentiments closely. Notably, the discounted cash flow (DCF) model estimates AMD's intrinsic value at $63.35, considerably below its current trading price. This discrepancy might suggest overvaluation.
Prediction and Investment Potential
For the next trading day and the upcoming week, AMD could see continued upward momentum if it maintains above the $161.78 support level, with potential to test the $170 mark if it breaches $164.47 resistance.
In the long term, AMD's linkage to AI and 5G trends highlights substantial growth potential. However, the current high P/E ratio and DCF evaluations could signal that the stock price has already factored in much of this anticipated growth. This classification aligns with signs of current overvaluation juxtaposed against its positive growth potential in emerging high-demand technologies like AI and 5G. Investors should look forward to the upcoming earnings announcement for a clearer outlook.
