AI Play AMD Stock May Be Nearing Breakout

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Advanced Micro Devices ( AMD ) was one of the first to follow Nvidia into the artificial intelligence market. It's starting to pay for Santa Clara-based AMD. Its stock is up 200% from an October 2022 low of 54.57 to trade at around 164 on Thursday afternoon. Also on Thursday, the Relative Strength (RS) rating for AMD stock rose to 84 from 80 the day before.

The upgraded 84 RS rating for AMD stock shows that the chipmaker's stock ranks in the top 16% of all stocks in IBD's database. This is a remarkable distinction. Over 100 years of market history shows that the best stocks have an RS rating of 80 or better as they begin their biggest runs.


AMD stock surges. Setting up for a breakout?

Additionally, AMD is a leader in the artificial intelligence revolution. competes with Intel (INTC) on microprocessors, the “brains” of computers. And resists it. Nvidia (NVDA) along with the graphics processor, the chip technology that servers use to process AI transactions.

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AMD is in a growth position, and has a good rating. However, please note that its fundamentals could use improvement. Analysts agree that an improvement may be imminent.

The watchlist candidate posted a slight 3% increase in EPS to 62% last quarter on 2% higher revenue of $5.47 billion. The consensus forecast is for a 60% rise in EPS this quarter on a 7% rise in revenue, with even stronger growth. Expected later this year.

Meanwhile, AMD has a bullish rate per share of 89 out of 99 in its other key rankings. It has a composite rating of 78, and an SMR rating (sales + profit margin + return on equity) of a medium C. A to E scale.

This AI play is collecting funds.

Reflecting its stark fundamentals, AMD stock has a Weak E Accumulation/Distribution rating, a gauge of buyability by institutional investors. Still, signaling with their hand that they see new highs ahead, the number of funds tracking AMD stock rose from 4,060 in September to 4,226 in December. According to MarketSurge data, the number reached 4,357 in March.

AMD stock rose on Thursday afternoon. This is more than 5% higher than the entry of 125.72 in the second stage cup with handle. This means it is now out of a suitable buy zone. Look for stocks to offer new buying opportunities, such as a three-week tight or a retracement to the 50-day or 10-week line.

AMD stock ranks No. 13 among its peers in the 39-stock electronics-semiconductor fabless industry group. NVIDIA (NVDA), Arm Holdings (ARM) and Broadcom ( AVGO ) is among the top 5 highly rated stocks in the group.

IBD's proprietary RS Rating measures technical performance by showing how a stock's price change over the past 52 weeks compares to other stocks in our database.


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