AMD shares fell 9% in extended trading Tuesday after the chipmaker reported data center sales figures that came in below Wall Street estimates.
The stock has trended sharply lower within a descending channel since falling below the 200-day moving average in October last year.
Investors should watch major support levels on AMD’s chart around $110, $95, and $81, while also monitoring a key overhead area near $130.
Advanced Micro Devices (AMD) topped Wall Street’s fourth-quarter profit and revenue expectations but posted data center sales below estimates, sending the chipmaker’s shares tumbling in extended trading on Tuesday.
After-hours selling intensified when AMD Chief Executive Lisa Su said current-quarter data center sales, which is a proxy for the company’s artificial intelligence (AI) chip revenue, will contract about 7% on a sequential basis. While Su did not provide a specific forecast for the company’s AI chips, she said she anticipates «tens of billions» of dollars in sales «in the next couple of years.»
Through Tuesday’s close, AMD shares had given up a third of their value over the past 12 months, weighed down by the chipmaker’s inability to make inroads into AI favorite Nvidia’s (NVDA) dominance of the lucrative AI chip market. The stock fell 9% to about $109 in after-hours trading.
Below, we take a closer look at AMD’s chart and use technical analysis to identify key post-earnings price levels worth watching out for.
Since falling below the 200-day moving average in October last year, AMD shares have trended sharply lower within a narrow descending channel.
More recently, the price has rallied into the pattern’s upper trendline ahead of the company’s earnings report, though the relative strength index (RSI) has failed to climb above the 50 threshold, signaling the stock’s inability to regain momentum.
Let’s identify three major support levels that could come into play amid follow-through earnings-driven selling and also point out a key overhead area that may provide resistance during countertrend rallies.
The first lower level to watch sits around $110 near a trendline that connects a series of peaks and troughs on the chart between May and October 2023. Although the stock is projected to open slightly below this price on Wednesday, it’s worth monitoring if the bulls can defend this area towards the close.
A decisive close below this level could see AMD shares tumble to around $95. This level on the chart finds support from a trendline that links the May 2023 pullback low with prominent troughs in September and October later that year.
Story Continues
