Why AMD Stock is Just Beginning to Accelerate Higher


 
 
01:22 04/06/2019

After finding double bottom support in late 2018, shares of Advanced Micro Devices AMD  have been incredibly explosive.

 

In fact, the stock has already run from $16 in early 2019 to nearly $30 a share.

 

Part of the reason for the run is thanks to analysts at Nomura, which gave the stock a buy rating.  The firm also noted that it may be able to steal market share from top competitors, like Intel and NVIDIA.  The analysts now have a $33 target price on the stock.

 

“We think that AMD’s high revenue growth and rapidly improving profitability justify what we consider to be an elevated [valuation] multiple,” said the analysts. “We believe that further share momentum, as well as favorable mix, will help drive AMD’s sales growth through 2019, 2020, and beyond.”

 

In addition, the analysts predict that AMD’s chip share of the datacenter market will rise to 10% .  They also see AMD notebook share rising to 15% to 20% from 12%, and for its chip share in desktop graphics to grow to 30% to 40% from 20%, as highlighted by Barron’s.

 

Interesting to note, Wells Fargo just lowered its rating on Intel to market perform from outperform, citing weaker demand in 2019 and increased competition from AMD.  'Investor sentiment could become more tempered amid increasing visibility into AMD share gain momentum,' analysts said, as quoted by CNBC.

 

Fundamentally, the outlook is powerful.

 

Technically, we are warning on near-term downside.  At the moment, the stock is oversold at its upper Bollinger Band (2,20), with oversold extensions on RSI, MACD, and Williams’ %R. Short-term, we’d recommend shorting the stock, and even picking up a put option to profit from any immediate-term technical pullbacks.

 

We’d also use weakness as a long-term buying opportunity.  




This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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