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Another nice quarter for NVIDIA?

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Asset Watch

Is there an AI upside for AMD?

Thursday, April 18, 2024

With higher interest rates and geopolitical tensions causing the S&P 500 to suffer technical breakdowns, single-stock risk has intensified. And with highflyers like AMD caught on the wrong side of the shifting momentum, a bounce or breakdown could be imminent.
HSBC analysts increased their AMD price target from $180 to $225 on Apr. 16, telling clients that “We expect AMD’s next generation AI chip solutions, such as the MI350/MI375/MI400 to be launched in 2H 2024, to be more direct competition to NVIDIA’s GB200.”
“We also think it is unlikely for NVIDIA to have 100% of the market share in AI GPU; our base case assumes AMD captures a 10% share by 2025 implying potential AI GPU revenue of USD12.3bn by 2025 vs. the current sell-side consensus/previous forecast of USD9.1bn/USD9.2bn.”
As HSBC expects AMD to generate much more AI revenue than the consensus, the stock could be a long-term winner. In the meantime, though, a make-or-break moment may be approaching.

AMD ended the Apr. 16 session above its 100-day moving average (near $163), and the metric has been a reliable trend indicator for some time. Similarly, the stock retested the breakout above the 2021 record highs, and the level is within ~$1.50 of the 100-day MA. As a result, both need to hold for the bull market to continue.

 

AMD also went from extremely overbought (RSI above 80) to approaching oversold (RSI below 35). The blue line at the bottom of the chart highlights how the indicator is near the 30 threshold, which often marks short-term bottoms.

 

So, is AMD a comeback candidate, or will support turn into resistance in the days ahead?


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