Kiwi_G
03-18

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@Barcode：$Advanced Micro Devices(AMD)$ @Kiwi_G Short term and long term take: $AMD the light purple band is 🔑 to hold $168 Higher Fib levels: $170.85, 174.33, $178.50, $180.75 Below $167 and $164.36 C&H on chart from earlier today. As of 4Oct24, $AMD closed at $170.90, with the stock moving higher in after-hours trading to $172.80. The stock has experienced strong upward momentum, increasing by nearly 5% in a single session. While this rally is encouraging for short-term traders, there are several fundamental issues and upcoming catalysts that deserve careful consideration. From a valuation perspective, AMD’s Forward P/E ratio of 50.15 may appear elevated compared to Nvidia’s 37.05. However, this does not automatically suggest that AMD is overvalued. Valuation metrics like P/E ratios can be misleading without a deeper understanding of the growth potential in the company’s key sectors such as gaming, data centres, and particularly AI. However, Nvidia’s commanding position in the AI chip market, where it holds over 90% market share, remains a critical differentiator. AMD, despite notable growth, struggles to keep pace with Nvidia’s lead in AI-related technologies. On the technical front, AMD has recently shown a bullish breakout, as indicated in the attached chart. The breach of the $168.27 daily resistance has fuelled the current rally, with the next key resistance zone between $180.75 and $184.82, as shown on the Monthly Top resistance levels. If AMD can clear these levels, it opens the door to further upside. At the same time, strong support lies at $164.36, with additional significant support at $156.21. Traders should watch these levels closely, as any pullback in the stock could provide an attractive re-entry point for those seeking to capitalise on shorter-term price movements. Moreover, AMD’s breakout from the descending wedge pattern supports the bullish case, signalling further gains are likely in the near term, barring any negative market developments. Traders should keep an eye on these technical markers as they provide valuable insights into price action. Upcoming Catalyst: Advancing AI 2024 Event (10 October 2024): A critical upcoming catalyst for AMD is the Advancing AI 2024 event scheduled for Thursday, 10 October 2024. During this event, AMD is expected to unveil its latest AI hardware innovations, including the next-generation Instinct MI325X AI accelerator and 5th Gen EPYC processors. These are key products that could position AMD more favourably in the AI race. The event, led by CEO Dr. Lisa Su, will also focus on how AMD is expanding its AI solutions ecosystem. Given the current excitement surrounding AI, any positive announcements could propel AMD’s stock price further, potentially driving it past the $180-184 resistance zone. Investors should closely monitor this event, as it has the potential to be a short-term catalyst for the stock. Financial Performance: While AMD’s stock price action is strong, its financials offer a mixed picture. In Q2 2024, AMD posted 9% year-over-year revenue growth and saw adjusted EPS increase from $0.58 to $0.69. Although these are solid results, they pale in comparison to Nvidia’s astonishing 122% YoY revenue growth in the same period. This highlights the stark contrast between AMD’s and Nvidia’s performance, particularly in the AI space. Additionally, AMD’s balance sheet shows mounting inventory levels, which could become problematic. Inventory growth has outpaced revenue since 2022, which raises concerns about potential overproduction or waning demand for certain products. If this trend continues, AMD could face write-downs or increased storage costs, impacting its financial performance in future quarters. Competitive Landscape and Long-Term Prospects: AMD’s long-term prospects, while promising in sectors like gaming and embedded systems, are challenged by its weaker position in AI compared to Nvidia. Nvidia has consistently outperformed in AI, data centres, and high-performance computing due to its substantial R&D spending. Nvidia’s R&D investment is currently 40% higher than AMD’s, a gap that continues to widen. This advantage allows Nvidia to maintain its technological lead, while AMD struggles to catch up. Nvidia’s superior financial position—with over $30 billion in cash compared to AMD’s $5.34 billion—gives it more flexibility to invest heavily in new technologies and acquisitions. Meanwhile, AMD’s cash reserves, while solid, limit its ability to challenge Nvidia on the same scale. Without aggressive investment in R&D, AMD’s role in the AI market will likely remain secondary to Nvidia, particularly as Nvidia continues to drive innovation with products like the Blackwell GPUs. While AMD’s short-term technical setup suggests further gains are possible, particularly around the upcoming AI event on October 10th, the long-term picture remains less certain. AMD has made significant progress in key markets such as gaming and data centres, but its competitive position relative to Nvidia is a clear weakness. Nvidia’s dominant market share, superior financial resources, and sustained R&D investment make it the more compelling choice for long-term investors. In conclusion, AMD is positioned for short-term gains, especially if the Advancing AI event delivers strong product announcements. However, for investors seeking longer-term stability and growth, Nvidia’s leadership in AI, its financial dominance, and its continued innovation make it the more attractive option. This report aims to offer a comprehensive analysis that not only highlights the technical and fundamental aspects of AMD but also provides a broader view of its competitive positioning. The detailed insights into AMD’s upcoming event, its financial performance, and market standing provide a more robust and thorough understanding than the previous report mentioned, giving a clearer sense of where AMD stands both in the short and long term. Cheers, BC 🍀
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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