AMD’s AI Hype Faltering? Technical Indicators Point to Potential Death Cross

Shares of **Advanced Micro Devices Inc.** AMD have experienced a rollercoaster ride in recent months, rising 21.54% over the past year but falling 8.91% year-to-date. Despite a recent surge following strong second-quarter earnings and the launch of AMD’s new **MI300X** AI chip, technical indicators are signaling potential trouble for the semiconductor giant. While **Cathie Wood**’s Ark Invest remains bullish on AMD, the looming threat of a **Death Cross** — a bearish pattern indicating a shift in market sentiment — could significantly impact the company’s performance in the coming months.

Key Takeaways

• AMD’s stock price has witnessed both growth and decline recently, with a 21.54% increase over the past year but a year-to-date drop of 8.91%.
• Despite a brief surge following strong second-quarter earnings and the launch of AMD’s MI300X AI chip, technical indicators suggest a potential Death Cross, a bearish pattern indicating a shift in market sentiment.
• Cathie Wood’s Ark Invest, known for its bullish stance on disruptive technologies, recently purchased a significant number of AMD shares, showcasing its belief in the company’s future.
• However, the looming Death Cross, combined with negative MACD readings and an RSI approaching oversold territory, raises concerns about potential downward pressure on AMD’s stock price.
• AMD is at a critical juncture, with the potential Death Cross signaling potential turbulent times ahead.

Ark Invest’s Big Bet, AMD’s AI Play

Following AMD’s strong second-quarter earnings, which exceeded analysts’ expectations, the stock witnessed a surge of 4.4%. This bullish momentum was further bolstered by the unveiling of AMD’s new AI chip, the **MI300X**, which has garnered significant attention in the technology sector. This positive performance led **Cathie Wood**’s Ark Invest, a prominent investment firm known for its focus on disruptive technologies, to invest a substantial $47.46 million in AMD across two of its exchange-traded funds (ETFs). This investment signifies Ark’s confidence in AMD’s potential to benefit from the rapidly growing AI market.

Read Also: Cathie Wood-Led Ark Invest Buys $47.5M Of AMD Shares And $12.7M of This Meta Platforms Rival’s Stock — Reduces Coinbase Exposure Amid Bitcoin Drop

AMD Stock Approaches Death Cross

Chart created using Benzinga Pro

Despite the recent surge, the technical landscape for AMD is becoming increasingly challenging. The stock’s current price of $134.27 sits below its 5, 20, and 50-day exponential moving averages, a clear indication of ongoing downward pressure. This situation, combined with the possibility of a **Death Cross**, a bearish pattern formed when the **short-term moving average** crosses below the **long-term moving average**, has raised concerns amongst market analysts. This pattern is often seen as a precursor to a more significant decline in stock price.

Chart created using Benzinga Pro

Adding to the bearish outlook, the **MACD** reading currently sits at a negative 8.36, while the **RSI** at 38.06 indicates that the stock is approaching oversold territory. Furthermore, AMD’s share price is hovering near the lower **Bollinger Band**, which signals a potential for further downward movement if the bearish trend persists. These technical indicators suggest that AMD’s recent performance could be a false sign of a sustained upswing.

Uncertain Future

Despite the positive developments surrounding AMD’s AI ambitions and Ark Invest’s investment, the looming shadow of the Death Cross and the negative technical indicators cast a cloud of uncertainty over the company’s future. The recent surge in AMD’s stock price may have been short-lived, and the potential for a sustained decline poses a significant challenge to the company’s growth trajectory. The coming months will be crucial for AMD as it navigates the complexities of a potentially volatile market.

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