There is no doubt AMD under the leadership of Lisa Su and the advantages of its IPs is on track for high growth by gaining market share on Intel and staying relevent if not competitive against Nvidia. AMD's P/B ratio is significantly lower than similar stock and PE ratio is also lower than the average in the industry. AMD also sees very high revenue growth as well as earning beats and guidance beats above industry average that are likely to continue due to its robust product refreshes. With that said, lets look at the technical.
AMD has been oversold due to crypto scare and stock downgrade manipulation, which allows for a significant upside for the undervalued stock and allows for an incredible upside. The recent gains also provides a great entry point as the bull trend is established after the amazing Q2 earnings and a break out looks ripe.
Range bound analysis sees an immediate resistance above 13$ at the downward trend line(last ditched effort for shorts), but a more than likely blowout Q2 announcement around end of july will crush that bearish bias and squeeze the shorts to test the recent highs around 15.
15 would be a fair value for AMD by the time Q3 comes out(provided with a decent market sentiment). More than a 30% upside for those with the patience. At least a 15% upside to 13$ in the near term.
Disclosure: I doubled my money with call options bought before Q2 after losing 30% by buying before Q1. Has a mixed portion of stock and options now.
Suggested strategy: Sell the stock and buy options when AMD stock dips and sell option to buy stock as AMD rally to major resistance levels.
Rocky - please explain you strategy comment at the ned of your commentary??
RockyXu
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@BobbySpa, In my opinion, AMD fair value would be 13-15 right now. So I have stock in AMD even tho I think AMD will correct to 12. If it go up to 14-15 in the near term, cool I make 10%.
In the likely case that AMD goes down to 12 for the near term, I take the 10% loss and I will sell my AMD stock, and buy August 13$ Option for cheap as a Q2 play. When Q2 comes around and AMD tests 15, I should be able to multiply my money even after the stock loss.
August 13$ option is 1.12$ right now and it should be around .70$ if AMD corrects to 12. You can do the calculations, and you can also buy 12 or 11 dollar august options based on your risk appetite.
BobbySpa
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@RockyXu, sounds like solid reasoning. Have always looked at the company very skeptically but it has peaked my interest as of late. Gun to the head....11.80 or 11?
RockyXu
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@BobbySpa, I defininately would not recommend the stock a year ago at this price but its a bargain at 12 dollars now, so I would say 11.80 is the lowest it would go without excessive market manipulation via crypto scare and fake security flaws.
BobbySpa
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@RockyXu, I will be patient here but agree on a second look that 11 should be lowest. Maybe play some options here myself. Thanks!
RockyXu
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@BobbySpa,
I had all my money in AMD options right before Q1 release, sold all the May options above 11, bought August Options with it, sold all the June options at 12.3 and bought AMD stock and sold all the July options at 12.9 yesterday And bought stock as well. So now I only have stock as well as a small amount of August options. Will buy more at dips...
BobbySpa
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@RockyXu, thanks....will following you and look forward to more commentary and insight.
RockyXu
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@BobbySpa, Cool, thanks. I will try to update at major levels.
matthewduxbury
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do I see a massive decending wedge on amd
RockyXu
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@matthewduxbury1989, Ya, its to compensate for your dick size