Advanced Micro Devices Stock Forecast: AMD stock surges over 12% on Fed rather than earnings

• Advanced Micro Devices closed up 12.6% on Wednesday.
• Fed Chair Jerome Powell aided the rally by saying rate hikes were working.
• NASDAQ closes 2% higher, AMD stock was the top performer in the S&P 500.
• Advanced Micro Devices offered poor revenue guidance for Q1.

Advanced Micro Devices (AMD) moved ahead sheepishly late Tuesday after CEO Lisa Su delivered a slight beat above Wall Street estimates for the fourth quarter. Once the Federal Reserve raised interest rates by 25 basis points as expected on Wednesday afternoon, however, the market unexpectedly shot higher, and AMD stock managed to close up an incredible 12.6%. Maybe AMD bulls were just waiting for the Fed’s scheduled announcement and Fed Chair Jerome Powell’s speech to be out of the way, but Q4 earnings and Q1 guidance were nowhere near good enough to engender Wednesday’s AMD price action alone.

The market’s price action following the Fed meeting almost entirely benefited the riskier end of the market – i.e. growth stocks like AMD. The growth and tech heavy NASDAQ roared 2% higher, while the value-heavy Dow remained essentially flat. AMD stock was the top performer in the entire S&P 500 for the session. Semiconductors as a whole did well. Nvidia (NVDA) and Applied Materials (AMAT) ranked as the sixth and seventh best performers in that index as well.