Advanced Micro Devices (AMD) shares plummeted 9% in extended trading on Tuesday after the chipmaker reported data center sales figures that came in below Wall Street estimates. The stock has trended sharply lower since falling below its 200-day moving average in October last year.
Investors should watch major support levels around $110, $95, and $81, while monitoring a key overhead area near $130. Despite topping profit and revenue expectations, AMD’s data center sales contraction of about 7% on a sequential basis sent the shares tumbling.
AMD Chief Executive Lisa Su anticipates “tens of billions” in AI chip sales in the next couple of years, but this optimism is not translating into gains for the stock. The company has struggled to make inroads into the lucrative AI chip market dominated by Nvidia (NVDA).
In a descending channel since October last year, AMD shares have trended sharply lower. A recent price rally ahead of earnings failed to gain momentum, with the relative strength index (RSI) failing to break above 50.
Key support levels include $110, where a trendline connects series of peaks and troughs between May and October 2023, potentially supporting prices if bulls can defend it. Further downside opens the door for a drop to $95 or even lower to the $81 level, which is about 32% below Tuesday’s closing price.
Investors should also watch a key overhead area near $130, which may provide selling pressure on a countertrend rally.
Source: https://www.investopedia.com/watch-these-amd-stock-price-levels-after-post-earnings-plunge-8786119