AMD Stock Bounces Off Key Support Level

Advanced Micro Devices

Advanced Micro Devices

AMD

$0.17



0.19%



22%

IBD Stock Analysis

• Stock broke out of a flat base last month, then retreated
• After pullback, shares now are bouncing off 50-day line
• Composite Rating is 98 out of best-possible score of 99

Composite Rating

Industry Group Ranking

Emerging Pattern

Pullback

* Not real-time data. All data shown was captured at
12:48PM EDT on
04/20/2023.

Advanced Micro Devices (AMD) is the IBD Stock Of The Day as the chipmaker prepares for an expected PC sales recovery in the second half of the year. Meanwhile, AMD stock has found support at a key level.

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In afternoon trades on the stock market today, AMD stock rose 1.3% to 91.08. During a recent pullback, it returned to the buy zone of its recent breakout.

On March 15, AMD stock broke out of a flat base at a buy point of 89.04, according to IBD MarketSmith charts. It climbed as high as 102.43 on March 23 before retreating.

In a positive sign, AMD stock found support at its 50-day moving average line. It is now bouncing off that key support level.

AMD Earnings Report Due

The Santa Clara, Calif.-based company plans to report first-quarter results on May 2 after the market close.

Analysts polled by FactSet expect AMD to earn 56 cents a share on sales of $5.31 billion in the March quarter. That would translate to year-over-year declines in earnings and sales of 50% and 16%, respectively.

When AMD reported fourth-quarter results on Jan. 31, the company predicted that the PC market would bottom in the first quarter. Demand for personal computers dried up after consumers and businesses binged on new PCs during the Covid-19 pandemic lockdowns.

In recent quarters, AMD’s sales have been buoyed by robust demand for data-center processors.

Analysts Forecast Better Times Ahead

BofA Securities analyst Vivek Arya rates AMD stock as buy with a price target of 98. He is positive on AMD because of its product roadmap this year and its exposure to cloud-computing providers who are spending heavily on artificial-intelligence projects.

“AMD is overall better positioned (than rival Intel (INTC)) given its high exposure to cloud vendors who should ramp up CPU (central processing unit) and accelerator investments on AI tailwind,” he said in a recent note to clients.

TD Cowen analyst Matthew Ramsay sees “muted” first-half 2023 results for AMD followed by a second-half rebound and a stronger 2024 and 2025. He rates AMD stock as outperform with a price target of 120.

“Near term, we continue to see a choppy first-half 2023 giving way to strong momentum in second-half 2023, with further acceleration to carry into a stronger 2024/25 as macro, cloud capex, and enterprise spending recover,” Ramsay said in a recent note.

AMD Stock On IBD Stock Lists

AMD stock is on three IBD stock lists: the IBD 50, Big Cap 20 and Tech Leaders.

Advanced Micro Devices ranks ninth out of 36 stocks in IBD’s fabless chipmakers industry group, according to IBD Stock Checkup. AMD stock has a stellar IBD Composite Rating of 98 out of 99.

IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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