The Bearish Case for Advanced Micro Devices

NASDAQ: AMD | Advanced Micro Devices Inc. News, Ratings, and Charts

AMD – A breakdown could soon occur in the chart of Advanced Micro Devices (AMD) if the stock breaks a support level that has formed over the past eight months. Read more to learn how to profit from this trading opportunity.

A breakdown could occur in the chart of Advanced Micro Devices, Inc. (AMD - Get Rating) if the stock breaks the support level that has emerged over the past eight months.

AMD designs and produces microprocessors for the computer and consumer electronics industries. The majority of the firm’s sales are in the computer market via CPUs and GPUs. AMD acquired graphics processor and chipset maker ATI in 2006 in an effort to improve its positioning in the PC food chain.

AMD is benefiting from sales of its Ryzen and EPYC server processors, due to the increasing proliferation of Artificial Intelligence (AI) and Machine Learning (ML) in cloud gaming. Its acquisition Xilinx is expected to boost its data center business. Management has also provided encouraging revenue guidance for this year.

The company had $2.3 billion in cash as of the end of the latest reported quarter. This compared to zero short-term debt. AMD also has a net profit margin of 25.5%. Earnings were up 62.5% and revenue rose 52.1% year over year in the most recent quarter.

The stock has elevated valuation metrics with a trailing P/E of 40.17 and a forward P/E of 43.48. The stock has shown mainly bearish momentum this year as seen in the chart below.

Take a look at the 1-year chart of AMD below with added notations:

  Chart of AMD provided by TradingView

AMD has formed a major level of support at the $74 (green) level over the past eight months. The stock looks like it may be making its way back down to that level again.

A trader could enter a short trade if the stock were to break below $74, with the expectations of a breakdown.

Want to Discover More Great Trades?

I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.

That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!

5 WINNING Stock Chart Patterns

Have a good trading day!

Good luck!

Christian Tharp, CMT

@cmtstockcoach

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


AMD shares rose $1.18 (+1.50%) in premarket trading Tuesday. Year-to-date, AMD has declined -13.20%, versus a 10.50% rise in the benchmark S&P 500 index during the same period.


About the Author: Christian Tharp


I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
AMDGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Stock Market Update: It’s Complicated!

The S&P 500 (SPY) may have bounced 17% from recent lows, but the outlook for stocks from here is...in a word...COMPLICATED. Read on to get Steve Reitmeister full market outlook and trading plan for this complicated market environment.

Becoming More Bullish on Stocks, But...

Stocks are on a roll with the S&P 500 (SPY) up more than 10% from the recent lows. Before you start getting too giddy, you should read this updated market outlook and trading plan Steve Reitmeister.

Stock Market Held Hostage

Uncertainty is the term most often applied to this stock market. Uncertainty over tariffs. Uncertainty of whether the S&P 500 (SPY) will fall into bear territory. Uncertainty over what happens next. Steve Reitmeister dives into the uncertainty to make sense of the market in this week’s commentary...

Stock Market Standing on the 50 Yard Line

Steve Reitmeister contemplates where the stock market stands now and what happens next in trying to stay on the right side of the market action. One path points to bear and one to new highs for the S&P 500 (SPY). Which will it be?

Bear or Bull Market?

The S&P 500 is on the brink of bear market territory...but that outcome is not a given at this time. Steve Reitmeister shares insights gleaned from his 45 years of investing to shine a light on current conditions along with his top picks...

Read More Stories

More Advanced Micro Devices Inc. (AMD) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All AMD News