- A Barron's technical analyst sees bearish signs for AMD and Rambus.
- AMD stock is nearly 200 points above its 50-day moving average.
- Rambus shows downside risk to $119 after three poor earnings reactions.
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AMD, Rambus Flash Sell Signals After 64% Semiconductor Rally
Advanced Micro Devices and Rambus are showing signs of technical weakness, according to a Barron's analyst, suggesting a pullback after a multi-month semiconductor rally.
"Cracks may be finally starting to appear, with several highflying names showing signs of fatigue," Doug Busch, senior technical analyst at Barron's Investor Circle, wrote on Thursday.
Busch did not provide a formal rating or price target change but outlined key technical levels to watch.
The analysis comes as the Philadelphia SE Semiconductor index (.SOX) has soared 64% since late March, fueling concerns of an overheated market. Any weakness in the high-flying chip sector could have wider market implications, as the group now comprises 18% of the S&P 500's weighting.
Technicals Turn for AMD
For Advanced Micro Devices (AMD), Busch highlighted several warning signs. The stock is trading almost 200 points above its rising 50-day simple moving average, a sign of being overextended.
A bearish RSI divergence that began in May, where the indicator failed to make new highs along with the price, suggests waning momentum. This is coupled with the risk of a bearish MACD crossover and the appearance of indecisive "doji" candles, which previously marked short-term tops in October and January. Busch sees a potential for the stock to trade back toward the $400 level.
Rambus Underperformance Continues
Rambus (RMBS) presents a different picture of weakness, one of persistent underperformance compared to the broader VanEck Semiconductor ETF (SMH). The stock has reacted poorly to its last three earnings reports, including a 21% gap down on April 28 that formed a bearish "island reversal" pattern.
The stock was trading around $132 on Thursday. Busch sees downside risk toward the $119 area, which would fill a gap from a May 5 trading session. This view is echoed by other platforms, with 24/7 Wall St. recently assigning a "Hold" rating and a $113.52 price target, citing falling royalty revenue and compressing margins.
The technical warnings for both AMD and Rambus suggest that after a period of enthusiastic buying driven by the artificial intelligence narrative, some investors may be starting to take profits. The coming sessions will be key to determining if these are minor pullbacks or the start of a more significant correction for the semiconductor sector.
This article is for informational purposes only and does not constitute investment advice.
[1] Advanced Micro Devices and Rambus Show Signs of Technical Vulnerability. Where Prices Could Be Headed. - Barron's[2] Analysis-Sizzling semiconductor trade at risk of cooling - and stalling US...[3] 8 Out of 9 Analysts Say Buy Rambus. We Say Hold. Here Is the Case for Stepping Aside[4] Advanced Micro Devices and Rambus Show Signs of Technical Vulnerability. Where Prices Could Be Headed.[5] AMD stock doubles in 2026, sparking bullish upgrades amid AI-driven demand and strong earnings. - Pluang
