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The last time AMD shares surged like this, the stock crashed 96%

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Trading Nation: AMD rally rages on

It's a bird. It's a plane. It's AMD.

Shares of Advanced Micro Devices have rallied to their highest level since May 2006, and that has some chart watchers nervous.

"History may not always repeat, but it does tend to rhyme," Craig Johnson, chief market technician at Piper Jaffray, said on CNBC's "Trading Nation " on Friday. "You look back at the late 1990s, you were up 500 percent before the stock reset."

AMD made a similar move from its lows in October 2002 to a peak in March 2006, a stretch where it rallied nearly 1,300 percent before crashing 96 percent over the next 2½ years.

"These kind of parabolic advances really only end one way — poorly," added Johnson. "From my perspective, I'm not chasing that stock here. I'll wait for it to come to me."

Since its multiyear low at under $2 in September 2015, AMD has surged nearly 1,900 percent.

Gina Sanchez, CEO of Chantico Global, cautions that AMD's high valuations serve as a warning on its shares and on the tech industry as a whole.

"Valuation is problematic," Sanchez said Friday on "Trading Nation."

"This is like a canary in the coal mine, basically saying that the tech sector is probably in bubble territory."

AMD trades at more than 55 times forward earnings, well above the SMH semiconductor ETF's 14 times multiple. The broader XLK technology ETF has a valuation of 18 times forward earnings, one of the highest multiples on the .

"This is pretty pricey, and I think it would be really hard to get rewarded later on at this price," added Sanchez.

AMD has rocketed 217 percent this year, topping out the S&P 500 for 2018 by a wide berth. The next best performer, ABIOMED, has increased by half as much.