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AMD's Bullish Momentum Continues with Technical Analysis and Market Insights

StockInvest.us, 2 weeks ago

Advanced Micro Devices Technical Analysis

Advanced Micro Devices, Inc. (NASDAQ: AMD) closed at $166.17 on June 5, 2024, marking a 3.86% increase. The day's trading range was between $161.38 and $167.12. The stock's Relative Strength Index (RSI14) stands at 57, suggesting a neutral momentum. The 50-day and 200-day moving averages are $162.32 and $143.02, respectively, indicating an upward trend in the medium to long term. The Moving Average Convergence Divergence (MACD) with a 3-month reading of 5.33 further supports this bullish momentum. The Average True Range (ATR) of 4.30 points to moderate volatility.

Current support is located at $165.83 with resistance expected around $187.06. Intraday technical indicators highlight a strong position above the 50-day MA, and barring drastic shifts, AMD could continue to hover between $165 and $175 in the next trading sessions.

Fundamental Analysis

AMD’s market cap is approximately $268.58 billion. Volume on the last trading day slightly exceeded the average (59.62 vs. 59.38 million), which is typically a bullish indicator. Still, the high Price-to-Earnings (P/E) ratio of 240.83 suggests the stock may be overvalued, especially when juxtaposed against an EPS of $0.69. The upcoming earnings announcement on August 6, 2024, will be crucial for adjusting this valuation.

The discounted cash flow (DCF) valuation trails significantly at $65.18, implying the market may have overly optimistic growth expectations. Consensus among analysts backs a long-term optimistic view with a median target price of $172.50; however, short-term fluctuations could be pronounced given recent news.

Advanced Micro Devices News Impact

Recent news surrounding AMD involves both competitive launches and positive industry sentiment. AMD's unveiling of new AI PC processors positions it competitively against Nvidia and Intel, a move expected to spur growth. The global AI market expansion forecasts underscore a beneficial macro environment, but general market views caution against overvaluation concerns affecting some semiconductor stocks.

Prediction and Evaluation

For the next trading day (June 6, 2024), given the technical indicators and current momentum, AMD is likely to trade within the range of $165 to $175. Over the upcoming week, barring unforeseen macro events or disruptive news, the stock has a potential to test resistance levels near $187.

Considering the fundamentals and news, AMD’s long-term investment potential remains strong due to its strategic moves in AI and semiconductor sectors. However, the discrepancy between intrinsic value (DCF) and market price raises caution for short-term investors.

Therefore, AMD classifies as a 'Hold' candidate based on its current overvaluation concerns but promising long-term growth potential anchored by strategic industry positioning and favorable market trends.

Check full Advanced Micro Devices forecast and analysis here.