The Advanced Micro Devices (NASDAQ: AMD) stock price has been in a strong freefall since March, erasing over $80 billion in value. It has crashed from a high of $227 to $162 and is hovering at its lowest point since February 21st.
Artificial Intelligence fatigueAMD’s stock crash has coincided with a major sell-off among most artificial intelligence companies. Nvidia, the most beloved name, has moved into a correction while Super Micro Computer is down by over 30% from its peak.
Other smaller AI companies like SoundHound AI and CrowdStrike have also pulled back sharply from their highest points this year.
This performance is mostly because of the fatigue among investors and profit-taking. Historically, stocks tend to pull back after going through a major rally.
It is also happening as investors wait for the next earnings from these companies. Super Micro will be the first big name to publish its results this week. It will be followed by Intel, which will publish on April 25th.
AMD will release its quarterly figures on May 1st followed by Nvidia on May 22nd. Most analysts believe that AMD’s results will be strong since investments in AI are still rising. According to SeekingAlpha, the hope is that AMD’s revenue will come in at $5.45 billion, higher than the $5.35 billion it made in the same quarter last year.
AMD has made a lot of progress as it continues its battle against Nvidia and Intel. On Tuesday, the firm released the Ryzen Pro 8040 processors for laptops and the Ryzen Pro 8000 for desktops. These processors feature advanced AI features that could see it boost its market share.
Analysts are bullish about AMD’s prospects in the chip industry. In a note this week, analysts at HSBC upgraded the company, citing its positioning in the AI sector. Similarly, UBS analysts have added the firm in their conviction list for big AI winners.
Evercore ISI analysts upgraded the AMD stock price to outperform. Other bullish analysts are from Barclays, Susquehanna, Cantor Fitzgerald, and Mizuho. The average target for the stock is $191.8, higher than the current $163.
I believe that AMD is a great company to invest in. It is a popular name in the semiconductor industry and data shows that it is continuing to grow its market share. At the same time, it will likely benefit as PC sales are bouncing back.
AMD stock price forecast
Turning to the daily chart, we see that the AMD share price has crashed hard in the past few weeks. It has dropped from a high of $227 in March to $162 today. The stock has already crashed below the 50-day Exponential Moving Average (EMA).
Most notably, the stock seems to have found support at the 100-day moving average. The Relative Strength Index (RSI) has continued falling and is nearing the oversold level. The Percentage Price Oscillator (PPO) has moved below the neutral point.
Therefore, the outlook for the AMD stock price is bearish, with the next point to watch being at $132.90, its highest swing in June 2023. If this happens, the stock could retreat by almost 20%. This view will be confirmed if it moves below the 100-day MA.
In the long term, however, I suspect that the stock will bounce back and retest its highest point this year.
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