AMD, IBM Take a 'Quantum' Leap, Together. Should Investors Also Jump In?
Here's how I'd play Advanced Micro Devices on news of their 'quantum-centric supercomputing' partnership, why I'm reiterating my price target and ... the chart.
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Advanced Micro Devices AMD and International Business Machines IBM announced early Tuesday plans to develop next-generation computing architectures. This cooperative effort will be based upon the combination of quantum computers and high-performance computing. What this is ultimately called is "quantum-centric supercomputing." Just when you thought generative AI was the next great thing and quantum computing the thing after that, here chimes quantum-centric supercomputing.
Don't look at me. When I was a kid, as long as you "cammied" up good and faded into the darkness you could not be seen unless someone popped a flare. Times are changing. Rapidly. In a quantum-centric supercomputing architecture, quantum computers will work together with powerful high-performance computing upon an AI-focused infrastructure. The technology will be supported by CPUs and GPUs.
Readers should remember as they read this, that I used to dig holes in the ground for a living. I used to be the smart guy at work because I actually read the paper on my commute, so this is a bit much. The way it's supposed to work would be that different components of a complex problem are targeted by the paradigm of the collaborative effort best suited to solve them.
There is belief as we move into the unknowable future that quantum computers will best handle the minutia in great detail while classical supercomputers powered by artificial intelligence might best handle large sets of data for analysis. Together, these technologies, in theory, will handle the real world's most difficult problems at unprecedented speed and scale.
IBM has already taken its first steps toward a vision where quantum computing and classical high-performance computing are "seamlessly" integrated. AMD processors, both CPUs and GPUs power the U.S. Department of Energy's "Frontier" supercomputer at the Oak Ridge National Laboratory. This is the first supercomputer to ever officially break the exascale barrier.
For those that do not know, which I assume is most of you, the exascale barrier is the ability of a system to achieve a quintillion calculations per second. Yeah. I think I'm pretty smart when I figure out the tip in my head at the local sports bar. Oh, by the way, a quintillion is a one followed by 18 zeros. Every second.
Charting Advanced Micro Devices
A few weeks back, I had shown readers a series of Bull Flag patterns of trend continuance as AMD had rallied this summer out of an inverse head and shoulders pattern that lasted through the spring.
Interestingly, this series of bullish continuances ended up developing into a Rising Wedge pattern of bearish reversal that finally cracked a couple of weeks ago.
Note that AMD gave up its 21-day exponential moving average last week, which usually results in the loss of the swing crowd. Here, though, the stock did not sell off hard, but until this morning, hit resistance for four consecutive trading sessions at that line. Should pre-opening levels hold, we see AMD trying to use that line as support as the swing crowd comes back into the name.
To hold that line, this morning's rally will have to force some improvement on the daily Moving Average Convergence Divergence below the chart. Here, we have a histogram of the 9-day exponential moving average that is mired deeply into sub-zero territory (bearish) and a 12-day EMA that is running well below the 26-day EMA (also bearish).
That set up needs to improve for this rally to hold and thus rally needs to hold in order for that set up to improve. Chicken or egg? Sort of.
Target Price: $209 (reiteration)
Pivot: $187 (recent high)
Add: Down to 50-day SMA (Currently $156)
Panic: Loss of 200-day SMA (Currently $125)
IBM?
I don't see the technical set-up just yet, but my older son invests avidly. He asked me about quantum computing stocks. I told him that I was long both Quantum Computing Inc QUBT and D-Wave Quantum QBTS and that maybe he wanted to also look at Rigetti Computing RGTI and IonQ IONQ. However, I also told him that these firms were just as likely to fail or be gobbled up by larger, well-known tech companies as they were to succeed, and that these investments are speculative in nature. That said, I did tell him that if I saw any legacy computer company making a serious move into this space, it would be IBM.
At the time of publication, Guilfoyle was long AMD, QUBT, QBTS equity.
