New Price Target for AMD Has Us Aiming Even Higher
Advanced Micro Devices proves a moving target after an analyst upgrade and a new product line, but what do the charts say?
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On May 15, we placed a $127 target price on Advanced Micro Devices AMD. At the time, we saw a U.S. - China trade deal as a catalyst that could drive the stock higher.
One month has passed, and the U.S. - China trade deal is still incomplete. Despite this, Advanced Micro Devices has already reached its target price.
Should I Stay or Should I Go?
Should investors take a profit after a quick gain? It’s a tempting thought, but when a stock quickly reaches its target, it could be a sign that there are further gains to come.
In the case of AMD, the stock’s chart indicates there is still plenty of upside potential. We're staying long the stock, and looking for additional gains.
Advanced Micro’s daily chart is showing every sign that the stock wants to go higher. AMD had already formed a series of higher lows (HL) and higher highs (HH), the very definition of a bullish trend.
The stock roared ahead by 9% on Monday, on very heavy volume (green arrow), an indication that institutional traders, the real market movers, are buyers of this stock. In another bullish sign, AMD closed above its 200-day moving average (red) for the first time this year.
Creating a New Target for AMD
How high can shares of Advanced Micro Devices climb? AMD’s advantage is that there are no major resistance hurdles to overcome on its near-term chart. If we move to the longer-term weekly chart, we can generate a new price target.
In this time frame, Advanced Micro has just broken a long-term downtrend, based on a recently broken descending trend line that had been intact since early 2024 (black dotted line).
In this time frame, there are three notable levels of resistance -- at approximately $160, $170, and $184 (blue lines). I’m taking the middle target of those three. A move from Advanced Micro’s closing price on Monday to the $170 area would generate a return of about 33%.
Piper Sandler Weighs In
What was the catalyst behind Monday’s big move? An analyst at Piper Sandler wrote that AMD could experience increased demand for the company’s graphics processing units, or GPU’s. AMD also recently unveiled its next-generation AI chips, called the Instinct MI400 series.
Piper Sandler’s target price for Advanced Micro Devices is a more conservative $140. Earlier, analysts at the firm placed a $125 target price on the stock - another target that has already been achieved.
At the time of publication, Ponsi was long AMD.
