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.
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.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.