Advanced Micro Devices (AMD) is the IBD Stock of the Day as it attempts a breakout from a small handle. AMD shares have gained over 90% this year as the chipmaker positions itself in the fast-growing artificial intelligence (AI) market.
AMD Business Overview
The Santa Clara, California-based AMD competes with Intel in central processing units (CPUs) for personal computers and servers. It also challenges Nvidia in graphics processing units (GPUs) for PCs, gaming consoles, and data centers.
AMD is targeting the AI chip market, currently dominated by Nvidia, sparked by the expansion of generative AI applications. AMD plans to officially launch new AI accelerators detailed earlier this year to compete in this space.
AMD Recent Stock Performance
On November 22nd, AMD stock rose 2.8% to close at $122.51. Shares are up over 20% since October 31st earnings report, forming a cup-with-handle base with a $122.11 buy point.
Q3 Financial Results
In Q3, AMD reported adjusted earnings per share of $0.70 on sales of $5.8 billion, topping analyst estimates. Sales and earnings grew 4% year-over-year, breaking a streak of declines.
Q4 Outlook
For Q4, AMD expects strong data center and client segment growth, partially offset by lower gaming and embedded market sales. The 2024 sales projection for its new MI300 AI accelerator supports AMD’s position in the generative AI market.
Upcoming Catalysts
On December 6th, AMD hosts an “Advancing AI” event to officially launch its MI300 chips to compete with Nvidia. This could act as a catalyst for the stock.
Technical Analysis
AMD stock has a Relative Strength Rating of 94 out of 99, indicating it has outperformed peers over the past year. It also has a Composite Rating of 91 out of 99, among the best for growth stocks.
Conclusion
With new product launches aimed at the fast-growing AI space and continued market share gains, AMD looks poised to continue its stock run despite some near-term headwinds. Most analysts rate it a Strong Buy.
Disclaimеr
Thе information providеd in this articlе is for еducational and informational purposеs only. It should not bе construеd as invеstmеnt advicе. Thе author is not an invеstmеnt advisеr and this articlе should not bе viеwеd as a rеcommеndation to buy or sеll any sеcurity.
Plеasе conduct your own duе diligеncе and consult a rеgistеrеd invеstmеnt advisеr bеforе making any invеstmеnt dеcisions. Invеsting contains risks including thе potеntial for loss of principal. Past pеrformancе doеs not guarantее futurе rеsults.
