AMD (NASDAQ:AMD) is having plenty of technical resistance whenever it tries to rally. Why? Valuations continue to limit the stock’s upside. And although cash levels continue to grow and debt is falling, AMD faces ongoing competition from Intel (NASDAQ:INTC) on the desktop PC space.
Nvidia (NASDAQ: NVDA) and Intel’s new discrete GPU initiative will put some pressure on AMD’s Radeon segment. When will AMD selling pressure end and follow with a breakout?
At the Bernstein strategic decisions conference, CEO Lisa Su reminded investors that AMD is on a multi-year journey. In the last few years, the company lowered its debt while earning customer trust. The product roadmap is for the many years ahead. Today, AMD is meeting the needs of the DIY market for PCs.
After the lockdown, gaming demand for PC and consoles grew sharply. But as this eases, gamers are unlikely to rush and go out. Instead, purchases in faster AMD processors and gaming cards should drive sales higher.
In the last month, AMD stock barely moved, stuck in a trading range at around the $55.00 level. Though the company won’t report results until some time in July, investors will need to watch monthly gaming title sales for clues on PC demand. Investors who hold AMD stock should continue doing so while those who missed the entry point at $40 may not want to buy at these prices.
