AMD Hits All-Time High of $279.34 on 12-Day Winning Streak, Longest Since 2005

Quick overview

On Thursday, Advanced Micro Devices (NASDAQ: AMD) finished at a new all-time high, marking its 12th straight day of gains, the company’s longest winning streak in more than 20 years. During the session, shares rose as much as 8.2%, finishing around $278. They are now up around 40% from their bottom for the year. The milestone is a big change for a stock that has gone up almost 190% in the past year.

TSMC’s Blowout Results Lift the Sector

A big reason for Thursday’s surge was a great earnings report from Taiwan Semiconductor Manufacturing Company (TSMC), AMD’s main chip-making partner. TSMC said there was strong demand for advanced semiconductor nodes used in AI accelerators and high-performance computing, which are two areas where AMD is aggressively growing. TSMC’s excellent results were seen as a good indicator for AMD’s own growth path going into its fiscal Q1 earnings report on May 5. This is because TSMC is a bellwether for the whole chip industry.

Analyst Upgrades Add Momentum to AMD Stock

Also, Wall Street’s mood has changed in AMD’s favor. Stacy Rasgon, an analyst at Bernstein, boosted his price objective on the company from $235 to $265. He said this was because AMD’s product mix was getting better, with a move away from lower-margin PC chips and into higher-margin server and data center products. Rasgon also pointed out AMD’s recently announced multiyear deal with Meta Platforms as a major driver of future growth. As part of a significant data center expansion, Meta will use six gigawatts of proprietary AI chips based on AMD’s MI450 architecture.

Almost as soon as the markets opened, the stock price went above Rasgon’s new target. This shows how quickly optimistic sentiment is exceeding formal analyst expectations. A total of 73% of analysts who follow AMD on Wall Street have given it a buy or strong buy rating, with an average price objective of around $289. Some analysts have set targets as high as $365. They point to the upcoming MI400 processor series and AMD’s ROCm 7.0 software platform as possible competitors to Nvidia in the enterprise AI sector.

Macro Tailwinds and Technical Strength

AMD is doing well because of a bigger “risk-on” movement in global markets, in addition to company-specific factors. Lowering geopolitical tensions, such as diplomatic measures to improve US-Iran relations, have helped stabilize oil prices and calm supply chain worries. These are situations that tend to be good for high-growth technology stocks.

Recently, AMD has broken through a number of important moving averages, which analysts see as a sign of a strong rally. The stock’s Relative Strength Index is in the upper 70s, which can mean that it is getting too hot too quickly. However, its MACD indicator is still going up in a bullish way. The options markets are also optimistic, with contracts that expire in mid-July pricing in a possible upside of almost 18% from where they are now.

Advanced Micro Devices (AMD) Stock Outlook: A Valuation to Watch

AMD’s fast rise is exciting, but there is one big problem: the company is now trading at almost 104 times trailing earnings and 41 times forward earnings. AI-driven demand is a great thesis for long-term growth, but those multiples don’t allow much opportunity for disappointment. On May 5, investors will be paying close attention to the results call to get clear information about AI chip shipments and how deep AMD’s partnership pipeline is with big companies like Meta.

For present, though, AMD is clearly in the lead.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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