AMD Stock Forecast and News: Advanced Micro Devices stock retreats alongside Nasdaq, S&P 500

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  • Meta gave AMD a huge new order for server processors for its data centers. 
  • Meta is raising its capex by 65% for 2022, which should benefit Advanced Micro Devices.
  • Bank of America raised its price target on AMD stock to $175.

Advanced Micro Devices (AMD) fell 0.8% on Tuesday along with the major indices. The Nasdaq Composite fell 0.6%, and the S&P 500 dropped 0.35%. AMD shares are down a further 1.3% in Wednesday’s premarket at the time of writing.

Advanced Micro Devices News: Rising targets on Meta expansion help AMD stock

The PHLX Semiconductor Index fell 0.07% on Tuesday but was kept from falling further by some big names such as Qualcomm (QCOM), which rose more than 0.5%.

Despite rising in Tuesday’s premarket, it is not unusual for a hot stock to take a haircut the day after a major surge in share price. Many investors likely wanted to take some profit off the table.

That is what happened on Monday when AMD announced that Meta (FB) would be purchasing a new version of its EPYC processors with more memory in all its data centers. AMD stock triumphed more than 10% on the news, which signifies AMD’s growing competitiveness in the data center and server sector that has been the major theatre of rival Intel.

Wells Fargo raised its price target on AMD stock from $145 to $180 on Monday. Bank of America also raised its target from $150 to $175. BofA analyst Vivek Arya wrote that the deal was significant “since Meta is the last major hyperscale hold-out to adopt AMD.” Meta, formerly known as Facebook, had until now been largely reliant on Intel for its data centers. Arya pointed out that this was an even bigger when for AMD stockholders since Meta planned to raise its capital expenditures by 65% in 2022.

Many investors may have already forgotten about AMD’s acquisition of Xilinx. The all-stock deal was announced on October 27 and would give AMD a majority market share of the complex programmable logic device (CPLD) segment of the semiconductor space.

Xilinx would also help AMD better compete with Intel (INTC), which controls about a third of the CPLD market through one of its own past acquisitions. AMD executives contend that the $35 billion deal would give AMD a total addressable market (TAM) of $110 billion.

On Thursday, November 4, Microsoft’s cloud business, Azure, announced that it would be adding Advanced Micro Devices’ 3rd Gen EPYC to its Dasv5 and Easv5 Azure Virtual Machines.

AMD key statistics

Market Cap $164.6 billion
Price/Earnings 42
Price/Sales 11.2
Price/Book 23
Enterprise Value $161.6 billion
Operating Margin 20.5%
Profit Margin

26.7%

52-week high $155.57
52-week low $72.50
Short Interest 5.7%
Average Wall Street Rating and Price Target Hold $136.16

Advanced Micro Devices (AMD) Technical Analysis: Down day offers new high

Despite ending the day slightly down, AMD stock scored another all-time high at $155.57. That high came at the very opening of the bell, and just 36 minutes later AMD stock bounced off its nadir at $143.93. This hearty level of volatility shows the market is still in price discovery mode now that Monday’s blastoff is behind it. The rest of the session saw AMD shares bounced around $149.

The 9-day exponential moving average at $136.07 should provide more certain support if AMD decides to give up some gains during the rest of this week. This is also near where Monday’s spike started from. Below here the 21-day exponential moving average at $126.27 offers a second backup. Additionally, the high-flying candles of this week have shot above the Bollinger Bands, which is typically a sign that there may be a retracement to come. Settling back to the mid-$130s or $140 before a second leg up would be understandable.

On the other side of things, if AMD stock breaks above the top trend line of the ascending price channel at $155.28, expect a further run-up to take place. On Monday, AMD’s swing high price bounced down from the 361.8% Fibonacci retracement at $153.71. On Tuesday, it opened just above it, which would lead one to believe that level has some significance. AMD stock price needs to surmount this level first before taking on the 423.6% Fibo at $162.96.

AMD daily chart