Advanced Micro Devices (AMD) is the IBD Stock Of The Day as the chipmaker is benefiting from healthy sales of chips for personal computers and game consoles this holiday season. AMD stock approached a buy point on Friday.
AMD stock has risen amid reports of continued strong sales of PCs fueled by the work-from-home and learn-at-home trends spurred by the Covid-19 pandemic. The Santa Clara, Calif.-based company makes central processing units, or CPUs, for personal computers and servers. AMD also makes graphics processing units, or GPUs, for PCs, gaming consoles and data centers.
Over the past 12 weeks, AMD stock has formed a double-bottom base with a buy point of 88.82, according to IBD MarketSmith charts. An alternative reading of its stock chart shows an early entry point of 87.15.
On the stock market today, AMD stock rose 0.6% to close at 87.22. Earlier in the session, it climbed as high as 88.
AMD Could Get Cryptocurrency Boost
Surveys indicate that notebook computers and video game consoles are hot products this holiday shopping season. In addition to making PC chips, AMD is supplying processors for Microsoft‘s (MSFT) Xbox Series X game console and Sony‘s (SNE) PlayStation 5 console. The Xbox Series X and PS5 consoles went on sale earlier this month. Both consoles are in short supply.
AMD also could get a lift from rising prices for cryptocurrencies such as bitcoin. Graphics processors are used for mining cryptocurrencies.
Demand for GPUs for cryptocurrency mining is rising again, BMO Capital Markets analyst Ambrish Srivastava said in a note to clients Wednesday.
“Although the impact seems minimal for AMD at this point, it is certainly worth keeping an eye on,” he said. Srivastava rates AMD stock as market perform, or neutral.
AMD Stock Tied For First Place In Group
On Monday, RBC Capital Markets analyst Mitch Steves reiterated his outperform rating on AMD stock and raised his price target to 100 from 92.
He sees bright prospects for AMD in its core businesses as well as from its pending acquisition of programmable-chip maker Xilinx (XLNX).
According to the IBD Stock Checkup tool, AMD stock is tied with four other stocks for first place in IBD’s fabless chipmaker industry group. AMD stock has a best-possible IBD Composite Rating of 99, as do Alpha & Omega Semiconductor (AOSL), Inphi (IPHI), Monolithic Power Systems (MPWR) and Nvidia (NVDA).
IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
AMD stock has an IBD Relative Strength Rating of 91 out of 99. That means it has outperformed 91% of stocks over the past 12 months. The best growth stocks typically have RS Ratings of at least 80.
AMD stock is on the IBD Big Cap 20 watchlist.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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