In the fiercely competitive AI hardware race, Nvidia (NASDAQ: NVDA) has emerged as the frontrunner. But this could soon change.
Advanced Micro Devices (NASDAQ: AMD) aims to launch its MI300 modular chip package near the end of this year. The new chip unit is suited for AI projects and for the data center high-performing computer (HPC) market.
The MI300 is designed to compete with Nvidia’s H100 chips. As a testament to its prowess, the new AMD chip unit is set to power the world’s most powerful supercomputer El Capitan in late 2023.
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Is AMD worth buying now?
AMD reports its Q2 earnings results after the close of trading on Tuesday, August 1.
Wall Street consensus estimate is $5.3 billion in revenue with adjusted earnings of 57 cents per share for Q2. That’s down from $6.55 billion in revenue a year earlier with a $1.05 per share.
Despite that, Susquehanna analyst Christopher Rolland maintained his positive rating on AMD stock on Monday, July 31, but lowered his target price to $135 from $145. Rolland believes shareholders should focus on AMD’s long-term AI prospects with the new chip unit release.
At the current price of $114, that’s an 18% gain. The technical charts, however, show a strong resistance at $125.
AMD technical analysis
The daily price chart shows AMD stock trading in a triangle pattern. This is mostly a neutral pattern, meaning the price can break out on either side.
AMD stock daily price chart: StockCharts.com
However, the weekly chart shows heavy resistance at the $125 price level. The stock could attempt to break through this level if Q2 earnings beat estimates. If successful, it will open the way toward the next level at $150.
If the price breaks the triangle on the lower side, expect to see $100 once again.
AMD stock weekly price chart. Source: StockCharts.com
AMD stock is up 78% year to date, lagging behind NVDA’s 226% gain.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
