uploads/2020/02/AdobeStock_245871537.jpeg

Is AMD Stock Overbought or Worth Buying?

By

Updated

Today, Advanced Micro Devices (NYSE:AMD) stock rose 1.08% at $55.12 as of 9:39 AM ET. Yesterday, the stock rose 1.19% and closed at $54.53. At the closing price, the company’s market cap was $63.8 billion. Currently, the stock is trading 0.9% below its 52-week high of $55.03 and 159.2% above its 52-week low of $21.04. On a year-to-date basis, AMD stock has returned more than 18% as of Thursday. In comparison, the S&P 500 Index has gained more than 4% year-to-date.

Article continues below advertisement

Today, RBC Capital analyst Mitch Steves raised the 12-month target price on AMD stock to $66 from $63. The analyst maintained his “outperform” rating on the stock. The new target price implies a 21% upside from the stock’s closing price on Thursday. Steves raised the target price for AMD stock after Nvidia (NASDAQ:NVDA) reported better-than-expected fourth-quarter results. According to a report from TheFly, “the overall gaming and data center market is healthy. The analyst is positive on the investments made by AMD that should pay off over the next 12 months and beyond.”

Analysts’ recommendations and target prices

Overall, analysts are on the sidelines on AMD stock. Among the 39 analysts tracking the stock, 15 recommend a “buy”—down from 16 in the previous month. About 23 analysts recommend a “hold”—up from 22 in the last month. Meanwhile, one analyst recommends a “sell”—unchanged from the last month. Analysts have an average target price of $48.59 on AMD. The target price implies a return of -10.9% based on the closing price of $54.53 on Thursday. The median target price was $50.00 on the same day.

According to TheFly, Bernstein analyst Stacy Rasgon thinks that it would be difficult to calculate the effect of coronavirus directly on US semiconductor companies due to possible demand and supply issues.

AMD’s stock returns

On Thursday, AMD stock closed 7.5%, 15.5%, and 34.6% above its 20, 50, and 100-day moving averages of $50.72, $47.20, and $40.51, respectively. The stock’s 14-day relative strength index score of 69 suggests that the stock is approaching overbought levels.

AMD’s upper, middle, and lower Bollinger Bands are $54.47, $50.46, and $46.45, respectively. The stock closed near the upper Bollinger Band on Thursday, which shows that it’s overbought.

AMD’s sales in the fourth quarter rose 49.9% year-over-year to $2.13 billion. The semiconductor company reported an adjusted EPS of $0.32 in the fourth quarter. Analysts expected the company to post an adjusted EPS of $0.31.

Read AMD 2020 Product Ramp Sends Stock to a 13-Year High and Could AMD Stock Rally Again after Hitting New Highs? to learn more.

Advertisement

More From Market Realist