AMD's Price Pullback Equals Opportunity: The Big Gains Are Coming

Advanced Micro Devices' (NASDAQ: AMD) November price pullback is an opportunity for investors to load up on this stock. While indicating a peak, this is a near-term quality peak driven by market dynamics and not the company’s fundamental quality. 

The market dynamic is that of a melt-up. Advanced Micro Devices is on the verge of a game-changing shift that will elevate its business from that of a niche competitor in the AI/datacenter industry to a viable competitor capable of dislodging NVIDIA (NASDAQ: NVDA) from its #1 position. Whether that happens is still in question, but the takeaway from November is that AMD’s launch of MI450 products in the second half of 2026 is expected to accelerate revenue growth, which is anticipated to reach the triple-digit range.

The market isn’t quite sure how big the revenue boost will be, and it's all being factored into the stock price. 

Simply put, Advanced Micro Devices is undervalued relative to its long-term forecasts. The long-term estimates, which have been improving, are likely to remain overly cautious, pricing the stock at 11x its 2030 earnings. In this scenario, Advanced Micro Devices' valuation could more than double over the next few years, with stock price gains amplified by an uptrend in earnings estimates.

The Q3 earnings release provided a reason—more of an excuse—to sell. Still, analysts' sentiment strengthened, as evidenced by the long-term revenue and earnings consensus, as well as an uptick in the initial sentiment revision. 

MarketBeat tracked revisions from numerous analysts within the first 12 hours of the release, and 100% are positive. The critical detail is that firms ranging from Wedbush to UBS are raising their price targets, suggesting a growing likelihood that this stock could move into the $300 range. That’s worth 20% of upside relative to the pre-release closing price and as much as 50% from the critical support target.

They cite better-than-expected growth, robust guidance, and an improving outlook for AI demand in their notes. As of early November, more than 70% of the 40 analysts tracking the stock rate it a Buy or higher, with approximately 25% pointing to a $280 to $310 price target.

Advanced Micro Devices Reports Wow-Quality Quarter and Guidance

Advanced Micro Devices' Q3 release included everything an investor could have asked for. The company’s revenue grew by 35.6% to $9.25 billion, outpacing the MarketBeat analyst consensus by 570 basis points, driven by strength in most segments. Embedded declined by 8% but is expected to inflect to growth soon, driven by improving consumer demand and the IoT. 

The other segments, including critical legacy markets such as Client and Gaming, grew robustly. Client grew by 46% and Gaming by more than 180% confirming end-market normalization, while the Data Center segment grew by 22%. It is supported by demand for Epyc processors and MI350 GPUs and accounted for 46.5% of the semiconductor business. 

The MI450’s impact on AMD’s 2026 and long-term outlook is significant. The OpenAI deal alone is estimated to be worth tens of billions and could unlock hundreds of billions in demand—enough to sustain high triple-digit growth in that segment and low triple-digit growth for the broader business over several quarters. Q4 guidance also looks strong, with the company offering a favorable revenue and earnings outlook that likely reflects conservative estimates.

The Technical Outlook: AMD Pulls Back Within Smoking Hot Rally

Advanced Micro Devices indicated a price peak and potential for a pullback even before the Q3 release. The stock price had increased by more than 180% and required consolidation or correction to allow market sentiment to catch up. With share prices down more than 3% in premarket trading following the release, there is a risk that they will continue to pull back in the near term.

However, the critical support is likely to be strong as it coincides with the top of the gap that formed in early October. Assuming this level (or a higher one) holds, new all-time highs will likely follow. Signs that support is strong and will produce a robust rebound include the volume spike the week of the gap and the MACD, which is an extreme peak and convergent with the latest highs. 

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The article "AMD’s Price Pullback Equals Opportunity: The Big Gains Are Coming" first appeared on MarketBeat.