AMD Technical Indicators Signal Caution: Is Death Cross Ahead For AI Stock?

Shares of Advanced Micro Devices Inc. AMD are up 21.54% over the last year but down 8.91% year-to-date. It has gained about 2.92% over the last five trading days.

In late July, the semiconductor giant enjoyed a brief resurgence after delivering second-quarter earnings that beat expectations — 69 cents per share against a forecasted 68 cents, and $5.835 billion in revenue, outpacing the $5.724 billion estimate.

This surge was welcomed by investors like Cathie Wood's Ark Invest, which seized the opportunity and purchased 328,527 shares across two of its ETFs.

Ark Invest's Big Bet, AMD's AI Play

Ark Invest's $47.46-million bet on AMD looked promising as the stock surged 4.4% following the earnings release. The bullish momentum was further fueled by strong data center performance and the unveiling of AMD's new AI chip, the MI300X.

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However, as the dust settles, technical indicators are signaling caution.

AMD Stock Approaches Death Cross

Chart created using Benzinga Pro

Despite the recent upswing, AMD's stock is showing signs of a looming Death Cross — a bearish pattern that emerges when the short-term moving average falls below a long-term one.

AMD's share price of $134.27 is currently below its 5, 20, and 50-day exponential moving averages, indicating ongoing downward pressure.

Chart created using Benzinga Pro

The MACD reading of negative 8.36 supports this bearish outlook, while the RSI at 38.06 suggests that the stock is edging closer to oversold territory.

The stock's price is also hovering near the lower Bollinger Band, which could imply further downside if the bearish trend persists.

Although Ark Invest's purchase and AMD's AI advancements provided a short-lived boost, the potential for a Death Cross could pose significant challenges for the company moving forward.

AMD finds itself at a critical juncture, with a possible Death Cross indicating turbulent times ahead. While Cathie Wood's Ark Invest remains optimistic about AMD's future, the technicals suggest a cautious approach.

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