AMD stock price has bounced back in the past few months, mirroring the performance of most companies, which have soared after Donald Trump’s Liberation Day. It has jumped from a low of $76.43 in April to $130, and formed a mini golden cross pointing to more gains.
AMD is gaining market share in AI
AMD, a top company in the semiconductor industry, has done well in the past few months as its market share in the artificial intelligence (AI) industry grew. It has become the most viable alternative to NVIDIA, which currently dominates the industry.
The most recent financial results showed that AMD’s business continued its growth trajectory in the last quarter. Its revenues rose by 36% in the first quarter to $7.4 billion, while its gross profit jumped by 46% to $3.7 billion.
The company has continued to expand its gross, operating, and profit margins in the past few quarters. Its net income jumped by 476% to $709 million.
Most of this growth came from its AI GPU products, which include the Instinct MI Series products like MI350X and MI335X. The company also sells MI300X, which powers AI workloads for companies like Microsoft and OpenAI.
Its other AI solutions are Radeon AI GPUs, which are designed for simpler consumer and professional workloads.
AMD has also built the ROCm 7 software package that it hopes will compete with NVIDIA’s CUDA. It is a parallel computing platform that allows software to use AMD’s GPUs for general-purpose computing.
AMD’s AI business also received a boost from its EPYC CPU solutions. Most notably, the client segment returned to growth, with its revenue rising by 68% to $2.3 billion, helped by the Zen 5 Ryzen processors.
The main challenge facing AMD is that its gaming and embedded segment continues to deteriorate. Its gaming revenue plunged by 30% in the first quarter to $640 million, while embedded fell by 3%.
Growth to continue, but challenges remain
Wall Street analysts are optimistic that AMD’s business will continue its growth trajectory this year. The average estimate is that its revenue will grow by 27% this year to $7.41 billion.
Its third-quarter revenue is expected to grow by 19% to $8.12 billion. For the year, analysts see its growth being 23% to $31.7 billion, followed by 17% to $37.7 billion.
The challenge, however, is that AMD and other semiconductor companies are caught in the ongoing geopolitical tensions between the US and China.
Donald Trump has ordered AMD, NVIDIA, and other companies to stop shipping both advanced and less advanced chips to China. NVIDIA expects these restrictions to cost it about $8 billion this quarter, while AMD will be hit by about $800 million.
AMD’s annual earnings per share (EPS) will be $3.87 this year, up from $3.31 last year. It will then have an annual EPS of $5.69 next year. AMD has a long record of doing better than estimates.
Read more: Nvidia lost half its market share in China: find out how
AMD stock price technical analysis
AMD stock chart by TradingView
The daily chart shows that the AMD share price has bounced back from a low of $76.43 in April to $130, its highest point since January 6.
It rebounded to the 38.2% Fibonacci Retracement level at $134. It formed an inverse head and shoulders pattern. Additionally, it has formed a mini golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA).
A mini golden cross is one of the most bullish patterns in technical analysis. Therefore, the stock will likely continue rising as bulls target the 50% retracement point at $152. A drop below the support at $110 will invalidate the bullish view.
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