Chipmaker Advanced Micro Devices (NASDAQ:AMD) has worn many hats in 2018. For the first four months of 2018, AMD stock wore the hat of relatively disliked semiconductor stock with a rough past. Then, from April to September, AMD wore the “red-hot semiconductor stock” hat. From September to October, AMD stock put on the “ice-cold” hat.

Now? AMD stock is wearing the “stuck in neutral” hat.

Long-term upside through data center market expansion is promising. But the valuation is full and arguably already prices that in. Revenue and margin growth have been stellar. But escalating trade tensions and falling semiconductor demand threaten that growth. Some analysts are calling AMD stock a top pick for 2019 — but other analysts are trimming estimates and price targets. The stock has cooled off a bunch from its 2018 highs. Yet, the Relative Strength Index indicates that AMD stock is neither overbought nor oversold.

Overall, for every positive regarding AMD stock, there is a negative. That is exactly why this stock has been stuck in neutral for the past several months around a reasonable valuation of $20.

This stock will stay in neutral for the foreseeable future. Until trade headwinds clear up, the broader semiconductor market outlook improves and/or AMD reports earnings which confirm data-center market expansion, AMD won’t get the big bounce bulls are looking for.

Considering many of those potential catalysts are a few months away from materializing, it looks like AMD stock is stuck in neutral for the next few months too.

Fundamentals Support Sideways Trading

At this time, the fundamentals underlying AMD stock support sideways trading.

AMD stock went parabolic from $9 in April to $36 in September due to the consensus thesis that AMD’s early lead in next-gen chip production would allow the company to steal significant server market share from server giant Intel (NASDAQ:INTC). That potential opportunity was huge, so AMD stock ran up to huge valuation levels on the idea that market share expansion was going to be huge and rapid.

Last quarter’s numbers confirmed that AMD is growing market share, but the gains aren’t huge — and they aren’t happening rapidly. AMD stock, which had run up to valuation levels only supported if the market share gains were both huge and rapid, sold off sharply.

Ever since, AMD has been stuck in neutral around $20 because this is a level where the valuation makes sense, assuming gradual but not out-sized market share growth in the server market. Until the market has some reason to believe that market share expansion will either entirely stop or be exceptionally fast, AMD stock won’t rally or drop big from here.

Meanwhile, the macro backdrop has significantly deteriorated over the past few months. Everyone is concerned about bigger tariffs and higher rates exacerbating an already slowing economy.

These two headwinds directly impact AMD. Bigger tariffs threaten to push costs higher for AMD, while simultaneously dampening global demand. Also, higher rates will pressure the valuation on AMD stock, which at 40 times forward earnings, is especially large and rate sensitive.

Overall, the fundamentals on AMD stock today simply do not lend themselves to a big rally above $20. As a result, this stock will be stuck in neutral around these levels for the foreseeable future.

You Need These Catalysts for an Upside Move

Before AMD stock breaks out of its sideways trading pattern, a few things need to happen.

First, AMD needs to report earnings that show robust data-center business growth and underscore that this company is rapidly gaining share in the server market. Second, trade tensions between the U.S. and China need to improve. Third, global semiconductor demand needs to firm up and strong data and AI demand need to compensate for weak smartphone demand.

Until those three catalysts materialize, AMD stock will likely be stuck bouncing around $20. But if you get all three of those catalysts in 2019, AMD stock could have another big year — and rally back to $30-plus.

Bottom Line on AMD Stock

There is potential for AMD stock to have another big year in 2019. But, that potential lacks visibility at this point in time. So long as this lack of visibility persists, AMD stock will be stuck in neutral.

As of this writing, Luke Lango was long INTC.