Advanced Micro Devices, Inc’s PC Problems Just Too Numerous to Avoid: FBR

Advanced Micro Devices, Inc (NASDAQ:AMD) shares plunged nearly 20% today after the company negatively preannounced second-quarter revenue and gross margin guidance. Adding insult to injury, FBR analyst Christopher Rolland reduced the price target for AMD to $3.00 (from $2.50), while keeping his rating at Market Perform.

PC Problems Just Too Numerous to Avoid

In his research report, Rolland wrote, “Last week, we reduced estimates for our covered PC companies well below the Street. However, the magnitude of AMD’s revenue shortfall was worse than anticipated, while we were particularly surprised by the poor gross margin guidance. Additionally, as highlighted in our PC brief last week, we believe there are growing risks to sanguine PC estimates for 2H15 and 2016 as we incorporate a more muted Windows 10 expectation, given that Microsoft has changed its go-to-market strategy for its next operating system, allowing Win 7 and 8.1 users a free Win10 upgrade.”

However, “We believe there is a high probability AMD further reduces operating expenses for the remainder of the year, mitigating some of the bottom-line impacts. In summary, we are reducing our 2015 AMD EPS estimate from ($0.26) to ($0.43) and lowering our 2016 EPS estimate from ($0.16) to ($0.29).”

Analyst Performance


According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Christopher Rolland has a total average return of 10.1% and a 61.2% success rate. Rolland has a -1.2% average return when recommending AMD, and is ranked #362 out of 3691 analysts.

AMD Chart

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