Advanced Micro Devices (NASDAQ: AMD) is in a peculiar position. The chipmaker has long been the main rival of stock market darling Nvidia (NASDAQ: NVDA) in terms of high-end GPUs.
The company has, thus far, failed to capitalize on the ongoing artificial intelligence (AI) boom — despite the fact that its line of products stacks up admirably against Nvidia’s according to benchmarks.
AMD stock suffered comparatively little in contrast with its main competitor in the bloodbath that ensued after the release of Chinese AI model DeepSeek. It remains an enticing value play in a competitive, prospective industry — yet the long-awaited move to the upside still hasn’t materialized.
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However, one noted technical analyst seems to think that the shift has already begun — and that Advanced Micro Devices stock will now begin a gradual climb to $148.
Descending channel chart pattern hints at AMD stock surge
AMD stock has been trading within a descending channel chart pattern since it reached an all-time high (ATH) price of $211 in early March of 2024, per a TradingView post shared by renowned and prolific chart expert TradingShot on January 30.
In this pattern, the price of a stock tends to ‘bounce’ between two parallel descending lines. The last two times that the price action of AMD shares entered a bullish leg (a climb from the lower trendline to the higher one), prices surged by 32.85% and 35.40%.
At present, the analyst believes that the thus-prevailing bearish leg of the pattern has come to an end. The 1-day relative strength index (RSI) technical indicator, which is used to identify whether an asset is overbought or oversold, is showing higher lows, while the price is simultaneously exhibiting lower lows — and such bullish divergences tend to signal a reversal.
The researcher set a $148 price target — which would equate to a 23.88% upside from the $119.47 that AMD stock was changing hands at as of press time.
Analysts confident that Advanced Micro Devices stock can recover
While TradingShot’s prediction does involve a significant move to the upside, it is far from a fringe opinion. In fact, the average price target for AMD stock set by Wall Street analysts is even higher, at $173. Even more cautious researchers, like Matt Bryson of Wedbush, who recently slashed his price target on account of DeepSeek, have set price targets at or above $150.
Readers should keep in mind, however, that per the typical price action seen with a channel-down pattern, there is a high probability that AMD shares will pull back from $148.
On the other hand, it is apparent that Wall Street is confident that the stock can sustain those price levels in the long run. The semiconductor company will release its next earnings report on Tuesday, February 4, after market close.
Featured image via Shutterstock
