AMD Stock Slides Below Support As Traders Weigh Competition
After a spectacular June rally, AMD stock has stumbled in early July, weighed down by profit-taking, competitive concerns, and renewed...
Quick overview
- AMD stock experienced a significant rally in June, surging 28% before facing a reversal in early July due to profit-taking and competitive concerns.
- The stock dropped to $134.60, breaking below its 100-week simple moving average, as traders reacted to renewed tariff discussions and competitive pressures from Intel.
- Leaked specifications for AMD's upcoming Zen 6 CPUs raised concerns about its competitiveness, particularly with lower core counts compared to Intel's offerings.
- Investors are closely monitoring key technical levels, with the potential for further declines if support around the 50-week SMA near $126 fails.
After a spectacular June rally, AMD stock has stumbled in early July, weighed down by profit-taking, competitive concerns, and renewed tariff chatter.
Strong June Rally Gives Way to Early July Reversal
AMD (NASDAQ: AMD) delivered one of the best large-cap tech performances in June, surging 28% and decisively breaking above major weekly moving averages, capping a dramatic rebound from its steep first-quarter sell-off. By last Monday, the stock reached a short-term high of $147.75, marking a major technical breakout that had bulls calling for further upside.
But as July trading began, the rally ran out of steam. Investors started eyeing elevated valuations, technical resistance, and potential headwinds on the competitive front. Last week, AMD underperformed broader U.S. indices, sliding to $135.12 by Tuesday before stabilizing near $137.90 to close the holiday-shortened week exactly at its 100-week simple moving average (SMA).
AMD Chart Weekly – Breaking Below the 100 SMA
Yesterday, the selling pressure resumed, with the stock dropping another 2% to close at $134.60, decisively breaking below the 100-week SMA even as the overall market recorded gains. The decline reflected both profit-taking after June’s surge and renewed anxiety over trade tariff rhetoric that resurfaced in headlines.
Competition Concerns Grow After Zen 6 Leak
Adding to the caution, new details emerged about AMD’s upcoming Zen 6 Ryzen CPUs. Leaked specifications suggested Zen 6 might top out at 24 cores—well short of Intel’s rumored 52-core offerings targeting similar high-end workstation and data center markets.
While Zen 6 may feature exceptionally high boost clocks exceeding 7 GHz, analysts cautioned that lower core counts could limit AMD’s competitiveness in key sectors, especially given the industry’s broader focus on AI workloads and high-performance computing (HPC).
These competitive worries prompted some traders to lock in profits after June’s parabolic move, re-examining AMD’s premium valuation in light of its rivalry with Intel and Nvidia.
Technical Levels in Focus: Support Gives In
Traders are now watching critical technical levels to gauge AMD’s next move. The stock is hovering around its 100-week simple moving average (green line), which has historically offered reliable support during past sell-offs.
If buyers step in at this level, AMD could stabilize and attempt to rebuild bullish momentum. But if selling pressure intensifies and this support fails, the next significant level lies around the 50-week SMA (yellow line) near $126.
Technical analysts see this lower band as a key battleground. A sustained move below it would increase the risk of a more pronounced correction, potentially undoing much of June’s hard-won recovery.
Looking Ahead
For now, AMD’s remarkable June surge has clearly given way to a period of caution and consolidation. Investors will be weighing multiple factors: the competitive roadmap versus Intel, broader macro and trade-policy risks, and the stock’s ability to defend crucial technical support.
How AMD trades in the coming sessions—especially around these key moving averages—will shape the next chapter in its volatile but compelling 2024 story.
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