Advanced Micro Devices was one of the first to follow Nvidia into the artificial intelligence market. It's starting to pay off for Santa Clara-based AMD. Its stock powered more than 200% higher from an October 2022 low 54.57 to trade at about 164 Thursday afternoon. Also on Thursday, the Relative Strength (RS) Rating for AMD stock climbed to 84, up from 80 the day before.
The upgraded 84 RS Rating for AMD stock shows the chipmaker's stock is in the top 16% of all stocks in IBD's database. It's a notable distinction. Over 100 years of market history reveals that the best stocks tend to have an 80 or better RS Rating as they launch their biggest runs.
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Additionally, AMD is a leader in the artificial intelligence revolution. It competes with Intel on microprocessors, the "brains" of computers. And it competes with Nvidia with a graphics processor, the chip technology that servers use to process AI transactions.
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AMD is in position for growth, and it has good ratings. However, please note its fundamentals could use improvement. Analyst consensus is that improvement could be just around the corner.
The watchlist candidate last quarter reported a mild 3% gain in EPS to 62 cent on 2% higher revenue of $5.47 billion.The consensus forecast is for a 60% surge in EPS this quarter on a 7% rise in revenue, with even stronger growth projected later this year.
Meanwhile, among its other key ratings AMD has a bullish 89 Earnings Per Share Rating out of 99. Its Composite Rating is a so-so 78, and its SMR Rating (sales + profit margins + return on equity) is a middling C on an A-to-E scale.
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Reflecting its just-OK fundamentals, AMD stock has a weak E Accumulation/Distribution Rating, a gauge of buying by institutional investors. Still, tipping their hand that they see new highs ahead, the number of funds that track AMD stock rose from 4,060 in September to 4,226 in December. The number climbed to 4,357 in March, according to MarketSurge data.
AMD stock was up Thursday afternoon. It's more than 5% past a 125.72 entry in a second-stage cup with handle. That means it's now out of a proper buy zone. Look for the stock to offer a new buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week line.
AMD stock holds the No. 13 rank among its peers in the 39-stock Electronics-Semiconductor Fabless industry group. NVIDIA, Arm Holdings and Broadcom are among the top 5 highly rated stocks in the group.
IBD's proprietary RS Rating measures technical performance by showing how a stock's price movement over the last 52 weeks compares to that of the other stocks in our database.
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