AMD Stock Signals Strong Buy Ahead of Earnings

Key Points

• Advanced Micro Devices is setting up for a robust rebound that could begin with the FQ1 earnings release.
• The market has overcorrected and is now at deep-value levels, with solid growth in the forecast.
• Long-term forecasts are too low and do not factor in the potential for market share gains. 

Advanced Micro Devices' NASDAQ: AMD stock price has retraced 100% of the AI-induced bubble, and offers a technical and fundamental entry point too good to pass up. The stock price is trading below the AI bubble launch point at the end of April, at the low end of the analysts’ target range, with no premium attached to the developments of the past two years.

Those include the combined effects of normalizing legacy markets and accelerating growth in data centers. AMD isn't NVIDIA and will likely never experience the same revenue surge. 

However, it is still a leading player in the AI data center semiconductor industry, experiencing robust demand and taking steps to secure its long-term future.

The technicals look very strong with AMD sold off to deep value levels. The market is overextended at these levels, showing support with high volume at the low end of the long-term trading range. Indicators like the MACD and stochastic are set up to send a clear entry signal, and the stochastic signal is already solid.

The MACD lags, but it is on track for a bullish crossover before the earnings release and could be a precursor to a strong post-release rally. 

A Catalyst Is Brewing for AMD’s Stock Price Rebound

Results and analysts could provide the catalyst. The analysts have reset their revenue and earnings growth expectations, but have set the bar too low. They expect revenue to decline sequentially despite demand trends in data centers and recent success in the gaming segment. 

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