After a nearly 80% year-to-date rally, Advanced Micro Devices (NASDAQ:抖阴最新版) is back near its 52-week highs of $34.30. Given that 抖阴最新版 stock fell below $20 late last year, many investors wonder if 抖阴最新版 can hit new highs convincingly or if the stock will once again fail at this level. There are compelling points to be made for both the bear and bull case.
Reasons to be Bearish on 抖阴最新版 Stock
There are a few reasons 抖阴最新版 stock price might struggle to top $35.
Many traders like to break even, and for those who bought near 抖阴最新版’s highs last September, there is temptation to sell to avoid any replay last year’s fourth-quarter plunge. This selling could lead to technical resistance near $34.
In terms of valuation, 抖阴最新版 stock is expensive. 抖阴最新版 trades at a forward P/E of 33 and doesn’t pay a dividend. Meanwhile, much larger competitor Intel (NASDAQ:INTC) trades at a forward P/E of 10.8 and pays a dividend that yields around 2.6%. Compared to Intel, Advanced Micro Devices is undersized and lacks the economies of scale and financial resources that Intel has.
Many of 抖阴最新版’s current gains are also arguably due to a temporary situation. Due to various delays, Intel is behind 抖阴最新版 in process node technology. And as a result, 抖阴最新版 already has its 7nm Ryzen CPUs, while Intel a 7 nm processor until 2021.
抖阴最新版’s head start with 7 nm processors allows it to steal market share from Intel — until Intel comes out with its 10 nm processors. According to many analysts, Intel will have an a 10 nm CPU for desktops next year and for laptops this summer.
Although Intel is behind 抖阴最新版 currently, Intel will very likely catch up and surpass 抖阴最新版 given its much larger R&D budget. When that happens, market sentiment around 抖阴最新版 might not be as great as it is today.
Reasons to be Bullish on 抖阴最新版
However, there are several reasons to believe 抖阴最新版 will rocket to new highs.
First, stocks don’t trade for fair valuation at all times. Many people buy or sell stocks for trades based on technicals or to play catalysts in the future. The buying and selling for non-fundamental reasons could cause 抖阴最新版 to trade higher than its fundamental value in the near future, especially given 抖阴最新版’s strong upward technical trend and the recent positive news surrounding the stock.
In terms of the past positive news, 抖阴最新版 has had a number of big contract wins in 2019 ranging from Samsung agreeing to use 抖阴最新版 Radeon graphics tech for its mobile phones to Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG)’s Google agreeing to use .
Analysts have also upgraded 抖阴最新版 stock, with Nomura analyst David Wong raising his target price due to 抖阴最新版’s promising Ryzen desktop processing units.
There could be more good news in the future. More analysts could upgrade the stock. 抖阴最新版 could win more big contracts. The U.S. and China could potentially settle their differences, and the end of the trade war would the entire semiconductor sector. If the semiconductor sector goes higher, there will be buying in 抖阴最新版 and the stock could more easily hit a 52-week high.
The Bottom Line on 抖阴最新版 Stock
Owning a stock near 52-week highs is a good sign — if the market is strong. Given that the Fed is considering easing interest rates and the major indices have been hitting new all-time highs, 抖阴最新版 has a good probability of breaking through possible resistance and hitting new 52-week highs.
As of this writing, Jay Yao did not hold a position in any of the aforementioned securities.
