AMD Stock: Following in Nvidia’s Footsteps?
As artificial intelligence continues to make waves, Nvidia (NASDAQ: NVDA) stands as a shining example of success. In 2023, NVDA stock saw an impressive 240% price surge and has continued to grow by over 60% this year. Interestingly, Advanced Micro Devices (NASDAQ: AMD), Nvidia’s rival, seems to be following a similar trajectory. The movement of AMD’s stock resembles the pattern seen in NVDA’s stock before its significant price surge. This similarity can be observed in the sideways channel pattern on the price chart of both companies.
Technical Analysis of AMD Stock
In terms of technical analysis, Advanced Micro Devices has broken below the floor of its rising trend channel in the medium to long term. This suggests a slower initial rate of increase for the stock. The price has retraced after a potential false break of the rectangle formation. A decisive move above $178 would provide renewed bullish signals for the stock. However, the price has retraced after confirming a break below the $178 level, indicating a bearish signal. Further downward movement could suggest ongoing bearish momentum for the stock. Traders may look for potential support levels below the current price to assess where the stock may find stability or potential reversal points. Currently, the stock faces resistance at $181, and breaking through this level could signal further upside potential. It’s worth noting that there is negative divergence between the RSI and price, indicating a potential downside reaction.
Could AMD Replace Nvidia’s Supply?
Advanced Micro Devices presents itself as a compelling alternative to Nvidia with strong positions in various industries. For years, AMD has maintained the second-largest market share in desktop GPUs. In 2023, AMD focused on developing hardware capable of competing with Nvidia, and now its new chips have arrived. Last December, AMD unveiled the MI300X AI GPU, which boasts performance on par with Nvidia’s H100 for training and even surpasses it by 10% to 20% for inference.
The introduction of AMD’s new chip has garnered attention, particularly with Microsoft’s (NASDAQ: MSFT) announcement in November. Microsoft revealed that its Azure cloud platform would be the first to incorporate the MI300X, enhancing its AI capabilities. This partnership positions AMD strategically, considering Microsoft’s 49% stake in OpenAI. Furthermore, AMD’s collaboration with Meta (NASDAQ: META), which plans to utilize the new chips, further brightens the company’s prospects in the AI sector.
To surpass Nvidia, AMD needs to increase its adoption by other major corporations. This can be achieved by introducing new chip offerings and ensuring faster and more reliable supply cycles compared to competitors.
Hot Take: A Promising Path for AMD
With its recent technological advancements aimed at expanding its presence in AI and the rapid growth of the sector, AMD stock appears poised to sustain its momentum in 2024. However, it still has work to do to surpass Nvidia’s dominance in the market. To all crypto readers out there, keep an eye on AMD as it continues to make strides in the AI industry.
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