Advanced Micro Devices, Inc. (AMD) shares rose more than 12% during Wednesday's session after the semiconductor company reported better-than-expected financial results for the second quarter. Revenue rose 26.1% to $1.93 billion during the quarter, beating consensus estimates by $70 million, and non-GAAP earnings per share came in at 18 cents, beating consensus estimates by one cent. The better-than-expected performance was driven by strength in AMD's Enterprise, Embedded, and Semi-Custom business units.
Several analysts raised their price targets on AMD shares following the second quarter financial results. Bank of America reiterated its Buy rating and raised its price target to $100 per share, citing secular tailwinds in core PC, gaming, and cloud segments. JPMorgan and other neutral analysts also raised their price targets but cautioned that the stock is trading with high expectations.
The chipmaker has seen significant strength since Intel Corporation (INTC) announced unexpected further delays to its 7nm chips. Lync Equity Strategies and other analysts believe that the delay could fundamentally reshape the PC/server industry that Intel has largely dominated over the past several decades and open the door to competitors like AMD.
From a technical standpoint, AMD stock extended its breakout from earlier this month to fresh highs. The relative strength index (RSI) moved further into overbought territory with a reading of 78.35, but the moving average convergence divergence (MACD) extended its bullish upswing. These indicators suggest that the stock could see some near-term consolidation, but the intermediate-term trend remains bullish.
Traders should watch for consolidation above prior highs of $71.63 or trendline support at $57.20 over the coming sessions. If the stock continues to break out, traders could see a move toward an ascending triangle price target of around $79.75. If the stock breaks down from trendline support, traders could see a move toward the 50-day moving average at $55.64 or lower trendline support at around $51.80.
The author holds no position in the stock(s) mentioned except through passively managed index funds.