Sign InSummary
AMD closed at $111.35 on August 15, 2023, with a slight decrease of -0.56% or $0.63, but with a mixed trend in relation to its moving averages and a balanced market sentiment, it is likely to see a positive trajectory in the upcoming week and potentially reach the analyst consensus price target of $118.77.
Technical Analysis
Advanced Micro Devices, Inc. (NASDAQ:AMD) closed at $111.35 on August 15, 2023, marking a slight decrease of -0.56% or $0.63. Despite the slight decline, AMD held steady with a day's low of $110.17 and a high of $113.18. From a 52-week perspective, the shares have witnessed a significant fluctuation, reaching a high of $132.83 and a low of $54.57.
Looking at the moving averages, AMD is trading above its 200-day moving average of $90.39, but slightly below the 50-day moving average of $114.95. This mixed trend in relation to its moving averages could suggest a cautious market sentiment, though it's still largely indicating a bullish long-term trend.
The stock's Relative Strength Index (RSI) is 52, reflecting a balanced market sentiment between buyers and sellers. Further, the Average True Range (ATR) which stands at 4.28 suggests the stock has high volatility.
From a volume perspective, the trading volume of 18.84 million was lower than the average volume over the past three months, which stands at 69.95 million shares. This low volume may suggest a bearish sentiment for the short term.
Fundamental Analysis
AMD has a significant total market capitalization of $174.95 billion. The current earnings per share (EPS) is $0.18, while its price-to-earnings (PE) ratio is at a high 603.56, indicating that the stock is currently overvalued when compared to its earnings.
According to analysts, the consensus stock rating for AMD is 'Buy’, with 1 strong buy recommendation, 24 buy recommendations, and 3 hold recommendations.
The consensus price target stands at $118.77, indicating a potential upside from the last closing price. The targets range from a high of $225 to a low of $65, with a median target of $108.
Furthermore, the discounted cash flow (DCF) analysis values the stock at $111.74, which is in line with the current stock price, suggesting a possible fair valuation.
News Analysis and Predictions
Recent news showcases mixed sentiments on AMD. Negatively, it's been suggested that AMD's growth story might be over with an expected decline in its revenue. Conversely, others are championing it as a buy due to its significant growth potential from AI accelerators and increased competition demanded by Nvidia's customers. AMD is also grabbing attention in the tech and semiconductor industry, as prominent investors like David Tepper's Appaloosa LP take big bets on the company.
Looking at these catalysts, it's reasonable to estimate that AMD stock could remain stable or slightly grow on the next trading day, August 16, 2023. Given the company's business strategy and involvement in the promising AI sector, the stock is likely to see a positive trajectory in the upcoming week, potentially nearing the analyst consensus price target of $118.77.
Final Stock Evaluation
Considering the above, while AMD's current PE ratio suggests an overvaluation, the market sentiment indicated by the RSI, the potential for growth in AI accelerators, and strong interest by investors all point to potential upside. It is therefore recommended to Hold the stock in anticipation of expected growth, especially for long-term investors. However, this should be considered along with a visible stop-loss, given the stock's potential volatility signaled by its high ATR.
