Advanced Micro Devices Inc. (NASDAQ:AMD) stock traded nearly 2% higher Friday as semiconductor and AI-linked stocks benefited from a broad market rally. The Nasdaq gained 0.98%, while the S&P 500 rose 0.99%.
AMD’s gain came as technology stocks rallied and investors focused on the chipmaker’s expanding AI opportunity.
AMD Sees $2 Trillion AI Opportunity
At the Goldman Sachs Communacopia + Technology Conference, AMD executives outlined plans for upcoming chips as the company works to capture rising demand for GPUs and CPUs used in AI data centers.
CFO Jean Hu said AMD’s total addressable market could reach $2 trillion by 2030 as AI drives greater demand for computing infrastructure. The forecast echoes CEO Lisa Su’s comments during the second-quarter earnings call.
The company sees its next-generation products as central to capturing more AI server and data-center spending.
Analysts are also watching AMD’s expanding AI portfolio. On Aug. 21, BMO Capital Markets initiated coverage with an Outperform rating. BMO highlighted AMD’s Helios AI rack, which it views as a direct competitor to NVIDIA Corp. (NASDAQ:NVDA).
The analyst expects Helios shipments to begin in September and believes the platform could help AMD capture a larger share of AI infrastructure spending.
The broader market also provided a tailwind Friday. Technology led all 11 sectors with a 1.39% gain, while 10 sectors traded higher. AMD gained 1.76%, slightly outperforming the technology sector.
Technical Analysis
AMD remains in a strong long-term uptrend. The stock trades 47.6% above its 200-day simple moving average of $346.89.
AMD is also above its 20-day SMA of $481.83 and 50-day SMA of $496.47. That keeps the near-term trend constructive.
Momentum is improving. The MACD is above its signal line, while the histogram is positive. That suggests buyers are gaining control after the previous pullback.
However, the 20-day SMA remains below the 50-day SMA. That bearish relationship points to some lingering short-term weakness despite the broader uptrend.
Resistance sits near $517.50. Support is around $463.
See More: Top Value Stocks
Analyst Outlook
Analysts have a Buy consensus rating and an average price forecast of $604.66.
Piper Sandler initiated coverage Thursday with an Overweight rating and a $600 price forecast. Raymond James upgraded AMD to Strong Buy on Aug. 25 and raised its price forecast to $641. BMO Capital initiated coverage with an Outperform rating and a $550 price forecast on Aug. 21.
The stock trades at about 128.5 times earnings, reflecting a premium valuation.
Benzinga Edge Rankings
AMD scores strongly on momentum, growth and quality in the Benzinga Edge Rankings.
Its Momentum score stands at 98.87, while Quality is 93.94 and Growth is 95.51. However, its Value score is just 4.11.
The combination points to a high-growth stock with strong momentum but a demanding valuation. That premium could make AMD more sensitive to earnings disappointments or weaker AI spending expectations.
Top ETF Exposure
AMD has significant exposure through semiconductor and technology-focused ETFs. It represents 8.10% of the iShares Semiconductor ETF (NASDAQ:SOXX), 5.86% of the ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) and 7% of the ARK Next Generation Internet ETF (NYSE:ARKW).
As a result, large ETF inflows or outflows can add to buying or selling pressure in AMD shares.
Price Action
Advanced Micro Devices shares were up 1.73% at $512.32 at the time of publication Friday, according to Benzinga Pro.
Image via Shutterstock
Login to comment