AMD shares tumble on weak third-quarter results

AMD shares fell 13.9% on Friday. The company recently reported a disappointing preliminary third-quarter earnings report, which fell well short of its previous outlook. AMD on Thursday cut its third-quarter sales forecast due to a sharper-than-expected decline in the PC market and supply chain issues. AMD now expects third-quarter revenue to be about $5.6 billion, down more than $1 billion from the midpoint of its previously given revenue forecast of $6.7 billion, primarily due to "a decline in processor shipments." AMD also said that non-GAAP gross margins are expected to be around 50%, compared with prior expectations of closer to 54%.

Several research houses, including Piper Sandler, Stifel, KeyBanc Capital Markets, and Mizuho Securities, lowered their price targets on AMD in a research note to clients on Friday but maintained a "buy" or "overweight" rating.

Shares of other chipmakers such as Intel and Nvidia also fell, falling more than 5% and 8%, respectively. Weak PC market demand and supply chain issues also weighed on these chip companies.

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