Advanced Micro Devices Stock News and Forecast: AMD pulls back with rest of market

AMD stock fell 0.7% on Wednesday.
Advanced Micro Devices may surge to $232.50 based on the current pattern.
AMD surged over 10% on November 8 after Meta Platforms said it would use EPYC processors in its data centers.

Clay Webster FXStreet

On Wednesday, Advanced Micro Devices (AMD) drifted sideways but traded higher afterhours. AMD stock closed at $151.34, down 0.7%. Trading within a bull flag pattern since November 8, AMD shares broke above the top trend line on Tuesday, November 16. The S&P 500 also dropped 0.26%.

Advanced Micro Devices (AMD) Stock News: The supercomputer chipmaker

Advanced Micro Devices announced that at this year's Supercomputing Conference, which is taking place currently through November 19 in St. Louis, it has more than tripled the percentage of the world's top 500 supercomputers that are powered by AMD tech. The chipmaker now powers 73 of the top 500 supercomputers compared to 21 – the figure from 2020. The company also powers four of the top ten supercomputers in the world.

“The demands of supercomputing users have increased exponentially as the world seeks to accelerate research, reducing the time to discovery of valuable information,” said Forrest Norrod, senior vice president and general manager of the Data Center & Embedded Solutions Business Group at AMD. “With AMD EPYC CPUs and Instinct accelerators, we continue to evolve our product offering to push the boundaries of data center technologies, enabling faster research, better outcomes and more impact on the world.”

Last week IBM's cloud division announced that it has chosen AMD's 3^rd Gen AMD EPYC processors for its IBM Cloud Bare Metal Servers. The new server offering from IBM features 128 cores, up to 4TB of memory and 10 NVMe drives per server. AMD says the processors are particularly good for "compute-intensive workloads, virtualized environments, large-scale databases" and hosting massive multiplayer online games.

AMD key statistics

Market Cap	$181.3 billion
Price/Earnings	46.2
Price/Sales	12.4
Price/Book	25.4
Enterprise Value	$178.3 billion
Operating Margin	20.5%
Profit Margin	26.7%
52-week high	$155.57
52-week low	$72.50
Short Interest	5.8%
Average Wall Street Rating and Price Target	Hold $140.51

Advanced Micro Devices (AMD) Stock Forecast: Bull flag still developing

AMD stock broke out on Monday, November 8, bounding up 10.1% on news that the former Facebook, now known as Meta Platforms (Wah-wuh!), made the decision to power its new generation of data centers with AMD's EPYC processors and servers.

Quickly, the stock corrected and began slowly edging higher in what appeared to be the consolidation pattern known as a bull flag.

As we wrote last Friday:

"Some might even venture to call this a bull-flag formation. This formation takes place when you have a large-scale run-up in a stock in a rather short period of time, so that when you zoom out on the chart, the surge seems almost vertical. This part is called the flagpole. When it hits an extreme high, such as Tuesday's high of $155.57, the stock then consolidates in the shape of a flag or pennant.

"This pennant has a downward slanting top line and an ascending bottom line that meet somewhere in the near future. Typically, this pattern stems from bulls buying up the shares of other traders who are taking profits. Once all the liquidity is taken from the market, the stock rises above the pennant's top line. When it does, the theory says the new spike will be equal to the percentage gain from the prior flagpole.

"If this were to happen for AMD, the resulting spike off the pennant (placed somewhere around $150) would present the opportunity for AMD stock price to jump to $232.50, which is another 55% journey from the breakout point."

FXStreet advice: Now is not the time to sell. If AMD stock falls below $140, we may change our prediction. However, under current conditions, AMD stock only dropped in line with the broad market. The most likely scenario is that the bulls continue to glom onto this one and push it to obscene levels. $232.50 is still our lodestar.

AMD daily chart

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.

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