Advanced Micro Devices, Inc. (NASDAQ: AMD) is a topic of great discussion. With what seems to be valid arguments on both sides of the coin, the bears and the bulls continue to battle it out, with the bulls winning so far in the game. Nonetheless, there’s a strong argument that AMD is gearing up for a rally thanks to a short squeeze in the making. Today, we’ll talk about:
- The debate surrounding AMD;
- the coming short squeeze;
- what we’re seeing from the stock today; and
- what we’ll be watching for ahead.
The Debate Surrounding AMD
As mentioned above, Advanced Micro Devices is a company that is surrounded by debate. On one side, the bulls argue that while the stock has seen a significant increase in market cap, it is still in its infancy and is quickly taking market share from the big players on the field like Intel (NASDAQ: INTC) and NVIDIA (NASDAQ: NVDA).
On the other hand, we have the bears. The bears argue that AMD won’t be able to continue grabbing market share at the rate it is grabbing it. As a result, at some point soon, the bears are betting that INTC and NVDA will start to stab back, and when they do, they’ll cause pain for AMD.
Personally, I side with the bulls. At the end of the day, AMD is stealing market shares in this David versus Goliath battle, and its not due to luck. Instead, the market share it is stealing is the result of innovation, marketing, and strong moves made by the company. Therefore, I’m expecting to see further growth.
A Short Squeeze In The Making
At the end of the day, if you’re looking for a strong short term opportunity, AMD is likely offering it. The stock, in my opinion, is gearing up for a short squeeze. At the moment, short interest on AMD is at around 23% and rising. Generally, I would say that this is a sign that declines are ahead, but there are those cases in which the bulls maintain control, sending the losses down the line to the shorts and leading to a short squeeze.
With such high short interest on AMD, I believe that a short squeeze is around the corner. After all, the stock has shown a strong trend upward over the past couple of years, and I don’t believe that this trend will stop. As the losses grow for shorts, they will be squeezed out of their positions, likely leading to a spike in the value of the stock.
What We’re Seeing From The Stock
Today, AMD is making its way upward yet again as the market cap continues to grow at a strong rate. Of course, our partners at Trade Ideas were the first to alert us to the movement. At the moment (9:10), AMD is traidng at $21.21 per share after a gain of $0.31 per share or 1.48% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AMD. In particular, we’re interested in following the story surrounding the company’s continued growth in market share as well as the potential short squeeze that we believe to be on the horizons. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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