Advanced Micro Devices Inc. (AMD) stock fell nearly 3% in Monday premarket trading as rising Treasury yields and higher crude oil prices pressured high-growth technology stocks.
Nasdaq futures fell 1.05%, while S&P 500 futures declined 0.56%.
AMD has had a strong run over the past year. As a result, weaker market sentiment could prompt some investors to take profits.
AMD's premarket decline appears tied largely to broader market pressure rather than a company-specific development.
Rising Treasury yields can weigh on richly valued growth stocks by reducing the present value of expected future earnings. Higher oil prices can also raise inflation concerns and keep pressure on interest rates.
That combination weighed on technology stocks Monday. AMD may be particularly sensitive because the stock is trading near the upper end of its 52-week range.
AMD Technical Analysis
AMD remains in a strong longer-term uptrend. However, several technical indicators suggest the stock has become stretched.
The shares are trading 16.2% above their 20-day simple moving average, or SMA. They are also 21.5% above the 50-day SMA and 68.2% above the 200-day SMA.
Meanwhile, AMD's relative strength index stands at 73.24. An RSI reading above 70 typically signals overbought conditions.
The broader trend remains bullish. The 20-day SMA is above the 50-day SMA, while the 50-day SMA remains above the 200-day SMA.
AMD has nearby technical support around $498, close to an area where buyers previously stepped in.
Analyst Outlook
AMD trades at a price-to-earnings multiple of about 160.9, reflecting a premium valuation. The stock carries a Buy consensus rating with an average price forecast of $615.30.
Bank of America Securities maintained a Buy rating on Sept. 25 and raised its price forecast to $720. Piper Sandler initiated coverage with an Overweight rating and a $600 price forecast on Sept. 10. Raymond James upgraded AMD to Strong Buy on Aug. 25 and raised its price forecast to $641.
AMD Edge Rankings
AMD scores strongly on momentum, quality and growth in the rankings.
The stock has a Momentum score of 99.29, a Quality score of 95.62 and a Growth score of 95.6. However, its Value score is just 3.3.
The combination highlights AMD's strong growth and momentum while also showing its premium valuation. That valuation could make the stock more sensitive when investors move away from high-growth technology names.
Top ETF Exposure
AMD has an 8.74% weighting in the iShares Semiconductor ETF (SOXX).
It also accounts for 6.79% of the First Trust Nasdaq Semiconductor ETF (FTXL) and 6.52% of the Pacer Data and Digital Revolution ETF (TRFK).
Because AMD is a major holding in these funds, significant ETF inflows or outflows can add to buying or selling pressure in the stock.
AMD Price Action
AMD shares fell 2.69% to $613.64 in Monday premarket trading, according to market data.
