The shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) are up 3.2% to trade at $53.96 today, and earlier hit a new record high of $54.48. As if that's not enough, data from Schaeffer's Senior Quantitative Analyst Rocky White suggests AMD is flashing a buy signal that indicates the chip stock's recent hot streak has legs.
In fact, AMD stock's recent high comes amid historically low implied volatility (IV) -- a combination that has been bullish for the stock in the past. According to White's modeling, there have been nine other instances in the past five years when the chip stock was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th annual percentile or lower -- as is the case with AMD's current SVI of 44%, in the 20th percentile of its 12-month range.
The data shows that one month after those three previous signals, the semiconductor stock was up 15.5%. From its current perch, another move of that magnitude would put the stock at the $62 level, which is nearly triple the AMD's March 8 bottom of $21.03. And even when the shares took a breather last month, their 40-day moving average caught the dip.
Despite the torrid hot streak, analysts remain skeptical. There are 24 brokerages covering AMD, and 14 rate it a tepid "hold." Plus, the consensus 12-month price target of $48.50 is a 10.3% discount to its current perch.