AMD on multiyear lows
A quick look at a chart of AMD and you might just think its a print of someone’s heart monitor. From pennies to $20 to $2 to $48 back to $5 then to $40 and now $7. You might say that this stock runs in cycles.
For the time being, AMD might just be in a world of hurt. Sluggish PC sales and constant competition with Intel make the daily grind at AMD that much more difficult. While the stock has done poorly in the last few months, things just might be getting brighter. A turnaround might be just under our nose.
AMD has turned the the red this year trying to compete with Intel. Its processors are loved by gamers and hated by the business-world which tends to favor Intel for processors. But new developments in the processing world might put AMD back on top and bring its stock with it.
The new chips are made with a very small wavelength UV light that can make more cuts or marks in less space, saving space on devices and processing time. More data can also be stored and processed through its chips because of the smaller incisions. AMD partnered with computer giant IBM to start experimenting with EUV lithography. New 22 nanometer chips are expected to come out in 2016 to replace today’s 45 nanometer chips.
AMDs chart looks like its ready for a turnaround as well. No stock has followed a trendline as perfectly as AMD. Literally since IPO, AMD has sat on the same trendline, bouncing from a few dollars per share to the upper $40s. Now that AMD is just $7 per share, this might be a long term buy.
The fundamentals don’t look that great, AMD might be starved for cash but its recent developments and its dominance over low end processors might give it a boost even in a recession. Short sellers are swarming the stock, currently 89.8 million shares are held short. As a breakout begins and the stock moves towards $10 per share, the short sellers are likely to cover, send the stock flying past $10 and into the teens where its first resistance lies at $16 per share. At $7 and change, AMD is a speculative buy.
