The Bears Are Coming(?) for AMD Stock

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AMD (NASDAQ:AMD) has entered a Surly stage recently with the stock now trading in a tight range betwixt the 50 mean solar day moving average and the 100 twenty-four hour period moving average. For those that may be unfamiliar with a moving average; this is an average normally used to rail the movement of share prices over a period of time, typical averages are the fifty, 100 and 200 day averages which point the motility of the cost of a stock. AMD's share price has languished following its contempo highs after the launch of its latest Ryzen 3000 series processors this July with AMD now off 8.97% from its July loftier of $34.39 per share. (cue 'Death of AMD chorus')

Pressure for AMD

AMD is nether pressure on multiple fronts recently with news of a trouble with its Turbo Boost functionality likewise as expected contest from Intel which is planning new processor releases and the expectations in the market of reduced prices. In addition to this the turnaround story of AMD is mostly played out as stated by James Brumley at InvestorPlace, "Now, more than three years in and the turnaround largely complete, the stock reflects its maximum plausible value. In other words, the turnaround is over." Which means whatever futurity moves by AMD will be based on the accomplishments of the visitor and continued positive revenue and earnings growth.

Intel (NASDAQ:INTC) has capitalized on the stumble of its rival AMDs Turbo boost issue to regain ground that information technology has recently lost with a series of production teases and release announcements such as the new Intel Cascade Lake-X cpus, the new Core i9-9900KS expected in October, the reported expectations of Intel inbound the GPU market place with its Next-Generation Xe Graphics card and the promise of ambitious competition in all areas of the CPU market place. Intel with the recent positive news is now trading well above the 50 mean solar day moving average with shares trading up about xv.46% above their recent 8/23/xix lows.

Going forrad the things to look out for is AMDs correction of its heave clock problems (you can read more about our coverage here) and the before long to release Threadripper HEDT updates. Also on the horizon are the expected releases of AMD's smaller Navi GPU's set to replace the aging Polaris cards the 570/580. Both of these products will exist a primary determining gene for AMD in future quarters while Ryzen 3000 series processors continue to sell well with some specific and highly popular processors like the Ryzen 3700x in curt supply. Hopefully AMD volition be able to continue ramping up supply to meet current demand to increase its ASPs (Average selling cost) across its product portfolio.

Expectations

Based on AMD's contempo history and successful execution thanks in large function to CEO Lisa Su who joined the company as CEO in 2014 and has since pb an astounding turnaround for the company there is a good chance of a motility up for the stock from hither based on the higher up factors. However, whatsoever negative reception to the expected boost fixes expected to roll out presently could see the share price tumble towards its 200 moving boilerplate and expected support points of $27.40 per share. In that location are considerable risks with an investment in AMD though equally the company is currently trading at a abaft PE Ratio of 166.1x which means that the price of a share as it relates to its actual past earnings puts it in a dangerous position in the event of an economic downturn. The forwards PE multiple is a much more than reasonable 28.51x which is based on the projected future earnings of the company.

Intel meanwhile is looking to once once more regain marketplace and mind share it has recently lost to AMD with new products and a wider release of its lamentably tardily 10nm process. Intel has a much more reasonable trailing PE ratio of 12.5x and a time to come PE of only 11.fifteen which just goes to show the continued authorization of Intel in the chip market place and the huge gap AMD volition demand to traverse to abound as a competitor. It will be interesting to encounter if Intel tin maintain the run up of its share price over the last week or if it volition once more tumble back to the 200 24-hour interval moving average of $49.35.