Peter Smith
AMD finds itself at a critical juncture. The semiconductor giant continues to push boundaries in CPU technology under Lisa Su's guidance, yet investors are growing nervous about shifting dynamics in the chip industry. After being rejected at a crucial resistance level, the stock now looks vulnerable to further declines, with charts pointing toward a test of the 100-day moving average.
Strong Business Fundamentals Meet Market Challenges
Advanced Micro Devices holds a commanding position in the semiconductor world, leading the x86 CPU market while seeing solid growth in AI and cloud computing segments. But the stock has taken hits recently after Nvidia and Intel announced their partnership, sparking worries about AMD's ability to compete effectively going forward.
Market analyst Ravi noted that while AMD's business fundamentals remain strong, the technical setup looks concerning, with indicators suggesting the stock could break down toward its 100-day simple moving average.
Technical Picture Shows Weakness
The daily chart reveals several troubling patterns for AMD:
- Descending Channel: The stock has been trapped in a downward-sloping channel since hitting highs near $186
- Moving Averages: Trading below the 9 EMA, 21 EMA, and 50 SMA, all of which are declining. The 100 SMA around $145 represents the next major support zone
- Key Levels: Support sits near $150, while resistance around $160 has consistently pushed back recovery attempts
- Failed Bounce: The recent attempt to climb from the channel's bottom was rejected at resistance, confirming continued downside risk
- Volume: Heavy selling volume backs up the bearish sentiment
What's Driving the Selling Pressure
Several forces are working against AMD shares. The Nvidia-Intel partnership has investors worried about AMD losing ground in artificial intelligence and high-performance computing markets. Semiconductor stocks remain highly volatile, swinging with broader tech market moves and profit-taking as valuations stay elevated. From a technical standpoint, AMD's failure to stay above its 50-day moving average leaves it exposed to deeper support tests.
Peter Smith
