How to Trade AMD After New AI Chip Unveiled

June 14, 2023 13:35

AMD announced plans to release a new chip for artificial intelligence that it hopes will rival NVIDIA. Learn more about this and what analysts are forecasting for the stock below.

Stock: Advanced Micro Devices Inc
Symbol for Invest.MT5 Account: AMD
Date of Idea: 14 June 2023
Time Line: 1 - 6 months
Entry Level: $133.00
Target Level: $200.00
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

AMD’s New AI Chip to Rival NVIDIA?

Chip maker AMD announced its most advanced graphic processing unit (GPU) chips for artificial intelligence (AI). It is called MI300X and will start shipping late this year. These types of chips are used to build AI programs and could be a new source of revenue for the chipmaker that is mostly known for the traditional type of computer processing chips.  

The MI300X has a capacity of up to 192 GB of memory, meaning it can run bigger AI models than current AI chips allow. For example, rival NVIDIA’s H100 AI chip has 120 GB of memory. One reason NVIDIA’s chips are so popular is that it enables developers to access the chip's core hardware features.

AMD announced that its chip will have its own software called ROCm. The chips will also offer Infinity Architecture to enable using eight MI300X chips in just one system. Most AI applications use eight or more GPUs at one time.  

According to AMD CEO Lisa Su, the market for data center AI accelerator chips could grow from $30 billion this year to more than $150 billion in 2027. However, AMD hasn’t yet announced a price for the chip. NVIDIA’s H100 AI chip costs upwards of $30,000 so it will be interesting to see if they try to compete on price by being cheaper.  

Whether or not developers take AMD’s chip on board remains to be seen. Therefore, it is uncertain how it could affect the bottom line until it is released and used by AI system creators. However, there were reports that Amazon Web Services – the world’s largest cloud computing provider – is considering using AMD’s chips.  

The stock rallied on the news but then fell further down when AMD did not officially disclose a flagship buyer for its chips. This highlights just how volatile trading anything related to artificial intelligence products can be. The wide range of analyst price targets for AMD stock shown below shows the huge difference of opinion in the prospects of AMD’s share price as well.  

The volatility is only likely to continue so it is important to exercise proper risk management and diversification when considering investing in AI chip makers.

AMD Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for a AMD stock forecast in the past 3 months, there are currently 21 buy, 8 hold and 0 sell ratings on the stock. The highest price level for a AMD stock forecast is $200.00 with the lowest price target at $77.00. 

The average price target for a AMD stock forecast is $123.04.

Source: TipRanks, 14 June 2023


An Example Trading Idea for the AMD Stock Price

An example trading idea for the AMD share price could be as follows:  

  • Buy the stock on a break above the post-news high of $133.00 to allow for volatility. 
  • Target just below the highest analyst price target of $200.00. 
  • Keep your risk small at a maximum of 5% of your total account.   
  • Time Line = 1 – 6 months  
  • If you buy 10 AMD shares:  
    • If target is reached = $670.00 potential profit [($200.00 - $133.00) * 10 shares].  

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how volatile chip stocks are right now.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in AMD stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy AMD Stock in 4 Steps  

With Admirals, you can buy shares in companies like AMD with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

  1. Open an account with Admirals to access the dashboard.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.   
  4. Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Source: Admirals MetaTrader 5. AMD. Monthly. Date: 1 Feb 2011 to 14 June 2023, captured on 14 June 2023. Past performance is not a reliable indicator of future results or future performance.


Click on the banner below to trade AMD stock today! ▼▼▼ 

Do You See the AMD Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance AMD's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.  

This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article. 


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.