Advanced Micro Devices Inc. (AMD) shares pushed higher Thursday, catching a ride on broader semiconductor strength after Micron Technology Inc. (MU) delivered quarterly results that made analysts' estimates look conservative. The chipmaker rally got an extra tailwind from November inflation data that came in cooler than economists anticipated.
Micron's Surprise Powers Sector Gains
Micron reported fiscal-quarter revenue of $13.64 billion, comfortably beating analyst estimates of $12.83 billion. Adjusted earnings came in at $4.78 per share, topping expectations of $3.95 per share. But the real headline was the guidance.
Looking ahead, Micron projected second-quarter revenue of $18.7 billion, give or take $400 million, crushing the $14.16 billion analysts had penciled in. The company also guided for adjusted earnings of $8.42 per share, with a range of 20 cents, nearly doubling what Wall Street expected. That's the kind of forecast that lifts all boats in the semiconductor harbor.
Inflation Data Adds Market Support
At the same time, U.S. inflation data came in lighter than expected, giving broader markets a lift. Consumer prices rose 2.7% year-over-year in November, compared to economist forecasts of 3.1%. That's a meaningful miss, though the story behind the numbers gets complicated.
The softer reading may be partly explained by technical factors. The 43-day government shutdown pushed data collection into late November, a period marked by heavy holiday discounting. The shutdown also led to the cancellation of October's CPI release, creating gaps in the inflation data.
In other words, the disruption seems to have blurred the real picture of inflation. Many economists expect prices to pick up again in December, which could add strain on households already struggling with higher costs tied to import tariffs. So while Thursday's number was market-friendly, it might not tell the whole story.
Technical Picture Remains Cloudy
Advanced Micro Devices is trading below key moving averages, reflecting short-term bearish pressure. The stock sits 5.3% under its 20-day simple moving average and 12.1% below its 50-day SMA, signaling difficulty in regaining upward momentum.
The RSI stands at 35.41, a neutral reading that leans toward oversold territory. While not in panic-sell mode, the stock appears to be losing bullish momentum, making upcoming support levels important to watch.
MACD remains below its signal line, reinforcing bearish momentum. Unless the trend shifts, AMD could continue to face downward pressure. Key support lies at $194.50, with a break lower opening the door to further downside. On the upside, resistance at $226.00 will be critical; a breakout above this level could mark a trend reversal.
The golden cross in July, when the 50-day SMA moved above the 200-day SMA, initially pointed to a bullish outlook. However, with the stock now below shorter-term averages, caution is warranted.
Looking at the 12-month performance, AMD has gained 67.00%, which reflects a strong longer-term trend despite recent struggles. This performance shows that while there may be short-term volatility, the stock has maintained a solid upward trajectory over the past year.
Advanced Micro Devices shares were up 2.15% at $202.40 at the time of publication on Thursday.