AMD Shares Hint At A Reversal As Charts Show Bullish Stick Sandwich Following A Double Downgrade From HSBC

In the dynamic world of finance, it's not uncommon for stocks to experience ups and downs, and Advanced Micro Devices (AMD) is no exception. The semiconductor giant has been on a rollercoaster ride lately, with its shares hinting at a potential reversal despite a double downgrade from HSBC. Let's dive into the charts and analyze the bullish stick sandwich pattern that could signal a turnaround for AMD.



The candlestick chart of AMD's stock reveals a unique 'Bullish Stick Sandwich' pattern, a technical trading formation that suggests a potential price reversal upwards. This pattern consists of a bullish candlestick sandwiched between two bearish ones, signaling potential buying strength amidst a bearish trend. A larger middle candle strengthens the signal, and confirmation of a reversal comes from subsequent bullish candlesticks, ideally breaking above the prior bearish highs.

This pattern was highlighted by John, the founder of Rock Trading Group, on Twitter, who believes that AMD could outperform Nvidia (NVDA) this year. While the bullish stick sandwich pattern is an encouraging sign, it's essential to consider other factors that could influence AMD's short-term trajectory.



HSBC's double downgrade of AMD from "Buy" to "Reduce" and the significant reduction in its price target from $200 to $110 have raised concerns about the company's long-term growth prospects. The analysts believe that AMD's AI GPU roadmap is less competitive than previously thought, with the MI325 GPU facing lukewarm demand and the company unlikely to have an AI rack solution to compete with Nvidia's NVL rack platform until late 2025 or early 2026.

As a result of the weakened AI GPU market penetration, HSBC lowered its fiscal 2025 AI GPU revenue forecast from $12.3 billion to $8.1 billion, which is significantly below the consensus estimate of $9.5 billion. This reduction in expected revenue growth could impact AMD's overall financial performance and long-term growth prospects.



Despite the double downgrade and reduced price target, the majority of Wall Street remains bullish on AMD's semiconductor stock. According to S&P Global Market Intelligence, the average analyst target price for AMD stock is $180.32, representing implied upside of nearly 50% to current levels. Additionally, the consensus recommendation is Buy.

Financial services firm Mizuho is one of the bullish firms on the large-cap stock with an Outperform rating (equivalent to a Buy) and a $180 price target. The firm sees AMD still in the early innings of its AI GPU ramp and well-positioned to gain share, while personal computer looks strong despite typical March quarter seasonality.

Financial services firm BofA Securities, meanwhile, has a Neutral rating (equivalent to a Hold) on AMD stock with a $155 price target. The analyst expects AMD's addressable market opportunity to grow strongly over the next few years but notes that AMD's data center accelerator products remain 1+ year behind the leader's roadmap and face increasing competitive threats from custom silicon at cloud customers, posing a headwind to future share gains.

In conclusion, AMD's shares hint at a potential reversal as the charts show a bullish stick sandwich pattern following a double downgrade from HSBC. While the pattern is an encouraging sign, investors should consider other factors that could influence AMD's short-term trajectory, such as the company's AI GPU roadmap and market penetration. Despite the double downgrade and reduced price target, the majority of Wall Street remains bullish on AMD's semiconductor stock, with an average analyst target price representing implied upside of nearly 50% to current levels. As AMD continues to navigate the competitive landscape, investors should monitor the company's execution of its product roadmap and developments in its AI strategy to assess its long-term potential.