AMD Surges Amid Intel Security Concerns and Cloud Gaming Growth
AMD shares climb as Intel faces potential security flaws, while cloud gaming opportunities boost AMD's outlook.
Morgan Stanley highlights promising growth in cloud gaming technology.
Shares of Advanced Micro Devices, Inc. (AMD) surged over 6% on Tuesday following revelations from Worcester Polytechnic Institute about a possible new security vulnerability impacting Intel Corporation (INTC). This vulnerability, dubbed SPOILER, allows attackers to exploit Intel CPUs via malicious JavaScript or malware, potentially exposing sensitive data such as passwords and encryption keys.
In a separate analysis, Morgan Stanley identified a "significant opportunity" for AMD in the cloud gaming sector, especially after AMD secured a role in Alphabet Inc.'s (GOOG) gaming projects. The firm estimates AMD generated $50 million in cloud gaming revenue during Q4. Despite this optimism, Morgan Stanley maintained an Underweight rating and a $17.00 price target for AMD shares, citing the stock's already elevated valuation.
The ongoing U.S.-China trade tensions continue to impact semiconductor companies. With U.S. policies pressuring allies to limit dealings with Huawei, many chipmakers face uncertainty in one of their most critical markets.
Technically, AMD's stock broke above the pivot point at $23.77, moving toward the trendline and the first resistance level (R1) at $25.28. The relative strength index (RSI) approached overbought levels at 61.88, while the moving average convergence divergence (MACD) indicates a potential near-term bullish crossover. These signals suggest further upside potential following the recent rally.
Investors should monitor for a breakout above the trendline and R1 resistance at $25.28, targeting the next resistance at $27.02 (R2). A successful ascending triangle breakout could propel AMD shares toward previous highs around $29.00, reached last October. Conversely, failure to surpass resistance may lead to a decline back to the pivot point at $23.77 or support near the trendline and 200-day moving average around $21.44.
The author holds no direct positions in AMD stock, except through passively managed index funds.
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