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AMD stock price forecast after Cathie Wood buys 330,000 shares

Posted on by darion

Advanced Micro Devices (NASDAQ: AMD) reported its second-quarter earnings on July 30, confirming the previous quarter’s strong results that exceeded analyst expectations, potentially motivating Ark Invest (ARKK) CEO Cathie Wood to invest a significant amount of money in the semiconductor company’s stock.

Namely, on July 31, Ark Invest announced the purchase of 328,527 AMD shares worth approximately USD 47.5 million (at the last closing price on July 31), which increased Ark Invest’s total holding of AMD shares by 158% to a total of 536,374 shares.

This trading activity has worried investors as a report was recently released Morning star called Wood’s fund a “wealth destroyer” because it lost more than $14 billion over the past decade.

AMD Stock Price Analysis

At last close, AMD shares were valued at $144.48 after rising 4.36% in the last trading session, extending its gains of 0.23% over the last five trading days.

It’s worth noting that AMD shares are among the weakest in the semiconductor sector, up just 4.26% year to date.

AMD YTD Stock Price Chart. Source: Finbold
AMD YTD Stock Price Chart. Source: Finbold

AMD Stock Technical Analysis

The latest technical analysis for AMD stock indicates bearish sentiment based on technical indicators.

This view is supported by the current price range of AMD stock, which, despite a 4.36% increase in the last trading session, is still trading below its 20-, 50- and 200-day simple moving averages (SMA).

Further analysis reveals that despite trading above the $144.41 support zone, the chipmaker’s shares are currently far from the identified resistance level of $174.55 that was set less than a month ago.

AMD Stock Technical Analysis. Source: TradingView
AMD Stock Technical Analysis. Source: TradingView

A Relative Strength Index (RSI) reading of 38, preceded by a downtrend, further supports the thesis of AMD stock weakness as it approaches oversold territory.

AMD Stock RSI. Source: TradingView
AMD Stock RSI. Source: TradingView

Wall Street analysts disagree with AMD stock technical analysis

Wall Street analysts tend to place little importance on technical analysis, as they are more interested in the fundamentals of a company and its long-term prospects, sections in which they believe AMD has a solid track record, as they assign a “strong buy” rating based on 31 reviews. Of those, 25 recommended “buy,” 6 recommended “hold,” and none recommended “sell.”

The average price target has been set at $191.37, implying a potential upside of 32.45% from current price levels.

Wall Street analysts have set a target price for AMD stock. Source: TipRanks
Wall Street analysts have set a target price for AMD stock. Source: TipRanks

On July 31, following the release of financial results, analysts from more than 15 Wall Street financial institutions shared their views on the chipmaker’s stock, with most experts reiterating their previous positions.

They are best summed up in a report by Piper Sandler analyst Harsh Kumar, who maintained an “overweight” rating on Advanced Micro Devices shares but lowered his price target from $195 to $175 amid concerns about the chipmaker’s potential growth prospects and market share.

Interestingly, most analysts lowered their price targets for the semiconductor company’s stock while maintaining their previous ratings, indicating their concerns about its potential growth going forward.

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