Advanced Micro Devices Stock Forecast: AMD shares buoyed in mid-morning trade after initial fall
- AMD stock appears poised for a further drop.
- Advanced Micro Devices has partnered with Meta Platforms on broadband initiative.
- AMD shares may find support at a demand zone that has worked on 10 occasions.
Update: AMD stock is trying its best at a turnaround. The much-watched semiconductor stock opened all the way down at $83.27 at the open but one hour in has made its way back to $86.92, a lost of just 1.1%. This rally follows in the footsteps of the Nasdaq, which has rallied by 0.45% despite the Nasdaq Futures being in the dumps during the premarket. Other tech stocks like Disney, Netflix and Meta Platforms have also rallied. It seems at least some traders are hoping to turn this depleted market around with stocks at either all-time lows or prices not seen in years.
Despite a good recent earnings call and outlook, Advanced Micro Deviced (AMD) has fallen well off its 2021 perch. New life has been breathed into this 50-year-old fabless legacy semiconductor firm in the past half decade, but this year's growth stock sell-off has humbled its share price growth streak and now threatens to tank it another 20% to the $72-$74 demand zone. AMD shares are down 1.5% to $86.60 in Thursday's premarket.
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AMD announced a partnership with Meta Platforms (FB) on Wednesday that would have the two corporations build out a joint mobile internet infrastructure to help unreached, especially rural, regions of the globe obtain broadband internet access. The initiative is called Evenstar, and it allows operators across the globe to build out radio access networks at their own discretion.
“We are excited to see AMD RFSoC solutions incorporated into Evenstar RUs in collaboration with our ecosystem partners,” said Jaydeep Ranade, director of wireless engineering for Meta Platforms' Connectivity unit.
This refers to AMD's Zynq UltraScale RFSoC radio chip it acquired through its acquisition of Xilinx last year. The announcement helped AMD stock rally more than 3% before ending the day down 0.9% overall on Wednesday. This still showed relative strength compared with the Nasdaq Composite index, which dropped 3% on the session.
AMD Stock Forecast: $72-$74 zone demands a meeting
AMD stock has been flagging for some time despite nothing but spouting continuous successes. This means AMD price action is related to macro sentiment rather than the company's own value and actions. AMD stock is trading at the time of writing within support at $86-$88, and the overall market seems destined to drop lower as inflation expectations and interest rate hikes receive all the focus of institutional investors.
The Relative Strength Index (RSI) reading on the weekly chart is at 39, hardly oversold to say the least. The Moving Average Convergence Divergence (MACD) also seems to be set on a continued decline. The next major pitstop for AMD stock should be somewhere in between the $72.50 to $74.96 demand zone (in light green) observed below. This region stretches back to September 2020, some 20-odd months ago, and has been tested for a total of 10 separate weeks.
Bullish traders need to wait for a crossover patter on the MACD for reentering.
AMD weekly chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
