AMD Stock Rises on Positive AI Chip Prospects and Technical Analysis

AMD stock has risen 86% since April and 18% YTD due to analysts praising its potential in the AI chip sector, with its MI350 series potentially rivaling NVIDIA's Blackwell chips. The stock has broken out of a flag pattern with high trading volume and is approaching a bullish golden cross. Key resistance areas to watch are around $175 and $215, with support levels at $135 and $115.

Advanced Micro Devices (AMD) stock has experienced significant growth, rising 86% since April and 18% year-to-date (YTD) as of July 2, 2025. The surge is primarily attributed to analysts' positive outlook on the company's potential in the AI chip sector. Specifically, the MI350 series chips have been cited as a direct competitor to NVIDIA's (NVDA) Blackwell chips [1].

The stock has shown remarkable resilience, breaking out of a flag pattern in Thursday's trading session on high volume. This breakout is seen as a continuation of the stock's recent upward trajectory. Technical indicators also suggest a bullish trend, with the 50-day moving average (MA) approaching the 200-day MA, hinting at a possible golden cross [2].

Key resistance areas to watch include $175 and $215. These levels could attract interest if the stock continues to climb higher. Meanwhile, support levels at $135 and $115 are worth monitoring during potential pullbacks [2].

Investors should also consider the broader market dynamics. While AMD's AI chip momentum is strong, the company faces risks such as supply chain constraints and competition from NVIDIA and Intel. TSMC's limited supply of CoWoS capacity and NVIDIA's 20-year lead in AI software pose significant challenges [3].

Despite these risks, AMD's AI chip momentum and strong fundamentals make it an attractive investment opportunity. The stock's 40% upside potential makes it a "Buy" for investors willing to bet on execution, although hedging is prudent to mitigate risks [3].

Investors will be closely watching AMD's fiscal second-quarter results scheduled for Aug. 5 for gross margin trends and data center revenue growth. The market will be particularly focused on these factors amid increasing competition in AI hardware [3].

References:
[1] https://www.investopedia.com/amd-stock-popped-after-analyst-said-new-ai-chips-could-take-on-nvidias-watch-these-key-price-levels-11770309
[2] https://www.ainvest.com/news/amd-stock-jumps-4-hsbc-raises-target-200-ai-chip-competition-nvidia-2507/
[3] https://www.ainvest.com/news/amd-stock-surges-hsbc-boosts-price-target-200-2507/