AMD looks to test downtrending resistance, however, the Saudi deal could prove it to finally break the long-term downtrend.

AMD shares rose in yesterday’s trading session following the announcement of a significant AI partnership between the United States and Saudi Arabia, among other deals. This development is a potentially strong signal for AMD’s medium-term outlook, particularly as optimism grows around a possible US-China trade agreement.

Technically, AMD is approaching a key resistance level at approximately $119 per share, marking the upper boundary of its long-term downtrend. A decisive break above this level could pave the way for a sustained rally, potentially targeting $175 over the next 12 to 18 months.

From a valuation standpoint, AMD currently trades at a price-to-earnings (P/E) ratio of 82 — roughly double that of NVIDIA. However, its forward P/E sits at around 25, reflecting expectations of robust earnings growth over the coming year, suggesting that the stock may grow into its valuation and some more. 

Overall, both AMD and NVDA have strong ratings on TipRanks, with most analysts recommending a buy on both shares.