AMD stock analysis: cup & handle points to more gains

AMD stock price has jumped in the last three consecutive weeks, reaching a high of $220, its highest point since February this year. It has jumped by nearly 200% from its lowest point in 2025, bringing its market capitalization to over $360 billion.

AMD stock is benefiting from the AI boom and key partnerships

Advanced Micro Devices, a top player in the semiconductor industry, is doing well now that it has become the biggest competitor to NVIDIA in the GPU industry.

Most notably, some of the biggest spenders in the sector are taking notice, with the company reaching major deals with companies like OpenAI and Meta Platforms.

The most recent results showed that its revenue rose to $10.3 billion in the fourth quarter, up by 34% from the same period a year earlier.

Most of this revenue growth came from the data center segment, which made over $3.8 billion, up by ~40% from the fourth quarter of 2024.

Its client and gaming revenue grew by 37% to $3.9 billion, while the embedded segment grew by just 3% to $950 million. For the year, the company’s revenue jumped to $34.6 billion, up from $25 billion in the same period a year earlier.

Analysts believe that the company's revenue will continue growing in the coming years as data center spending accelerates. The average estimate among analysts is that its revenue will jump by 32.6% this year to $9.86 billion, while its annual figure will grow by 34% to $46.53 billion.

AMD’s business will likely continue thriving as companies continue to look beyond NVIDIA, a company that continues to dominate the industry. A good example of this is Riot Platforms, a company that is building data centers with a focus on AMD chips. IREN is also spending millions of dollars a year on AMD chips.

Advanced Micro Devices is facing some major headwinds 

Still, a major challenge for AMD is that its business seems a bit overvalued, essentially when compared to NVIDIA. The company trades at a forward price-to-earnings ratio of 30, much higher than NVIDIA's 20x. 

This multiple is higher considering that NVIDIA is expected to continue growing at a faster pace than AMD. Analysts expect that AMD’s annual growth rate will be 34% this year and 43% in the coming year. For NVIDIA, the estimate is 71% and 30%, respectively.

Another challenge for AMD is that NVIDIA is working on its CPU, which will be launched later this year. This chip will likely disrupt a business in which the company has a substantial market share.

READ MORE: Intel, AMD soar on reported CPU price hikes amid supply chain crunch

AMD stock price technical analysis 

AMD share price chart | Source: TradingView 

The weekly chart shows that the AMD stock price has rebounded from a low of $76.52 in April last year to the current $220.

It formed a big up-gap in November last year, reaching a record high of $266 in January. It has remained above the 50-week and 100-week Exponential Moving Averages (EMA).

The stock has formed a cup-and-handle pattern, a common bullish continuation sign in technical analysis. This pattern is made up of a horizontal support and a rounded bottom.

Therefore, the stock will likely rebound, and possibly hit the all-time high of $266, which is about 23% above the current level.