AMD Nears Breakout as AI Demand Bolsters Data-Center Sales
AMD shares fell from a June high of $584.90 to about $456 while forming a bullish flag; Q2 revenue rose 50% to $11.5 billion and data-center sales jumped 107%.
Advanced Micro Devices shares fell from a June peak of $584.90 to about $456, tracing a descending channel that technicians classify as a bullish flag after a strong run-up earlier in the year. A decisive move above $584.90 would be treated as a breakout and could, in some analyst scenarios, open the way toward $600.
On the daily chart, the stock sits below the 23.6% Fibonacci retracement and beneath the 50-day exponential moving average. The Percentage Price Oscillator has remained under the zero line since June 30. Technical analysts say those indicators can signal near-term pressure even as the flag pattern is a common continuation setup following a sharp advance.
The company reported second-quarter revenue of $11.5 billion, a 50% increase from a year earlier. Gross margin rose to 54% from 40% in the same period a year ago. Data-center revenue grew 107% to $6.7 billion. Embedded revenue increased nearly 20%, while combined client and gaming revenue was about $3.8 billion, up roughly 6%.
Customers in cloud and enterprise IT have shown increased spending on infrastructure. Dell Technologies reported revenue of $47 billion in its most recent quarter, up 58% year over year. Hewlett Packard Enterprise reported revenue of $12.2 billion versus $9.1 billion a year earlier. Major AI customers, including Meta Platforms, OpenAI, Microsoft, Oracle and Anthropic, have indicated continued capital expenditures for CPU and GPU-based systems.
Brokerages adjusted their targets after AMD’s results. Raymond James raised its price target to $641 from $565 and retained a strong-buy view. BMO Capital Markets began coverage with an outperform rating and a $550 target. Rosenblatt, DA Davidson, TD Cowen and Wells Fargo issue favorable outlooks. Consensus analyst estimates project roughly $50 billion in revenue for the current year, with higher estimates for the next year.
Valuation metrics show a forward price-to-earnings ratio near 60. Some analysts describe that as high compared with industry peers. Market participants identify the pace of AI-related demand and product pricing in data centers as factors that will affect future revenue and margins.
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