AMD Shares Surge After Partnership Announcement with OpenAI

According to media reports:→ The deal involves AMD supplying processors of various generations to support the deployment of artificial intelligence infrastructure with a total capacity of 6 gigawatts.→ The partnership is expected to generate billions in revenue for AMD starting in 2026.→ Barclays analysts have raised their price target for AMD shares from $200 to $300.

The major announcement fuelled a sharp rally of around 30% in AMD’s share price, though this surge triggered aggressive selling pressure near the historic peak around the $227 level.

Technical Analysis of AMD Stock Chart

Price action analysis shows that:→ The trading session opened with a wide bullish gap, breaking through the key psychological level of $200.→ The price also surpassed previous resistance levels at $180 and $190.→ During the session, the price pulled back, forming two large bearish candles on the four-hour chart.

A reasonable interpretation:→ The initial reaction was highly emotional, but the optimism is fading quickly.→ The price movement indicates strong bearish activity following the sharp rise.

Selling pressure is being driven by:→ Investors locking in substantial profits now, as the deal’s financial impact will unfold gradually over time (creating future opportunities to re-enter at lower prices).→ Technical signs of an overbought market.

Signs that AMD shares may be overbought include:→ The RSI indicator, which exceeded 80 yesterday.→ The price opening significantly above the upper boundary of the ascending channel.

Possible Scenarios for AMD Stock Price

Short-term: Bearish activity could drive a correction towards:→ The median line of the ascending channel, where demand and supply typically balance.→ The psychological level of $200, which may influence sentiment among traders reacting to the news.

Long-term: AMD shares remain fundamentally attractive, given that:→ The AI boom continues to serve as a major growth driver.→ Market participants expect the Federal Reserve to begin cutting interest rates.