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Advanced Micro Devices Inc. AMD shares were sliding on Friday after the chipmaker warned of a revenue shortfall and lowered its gross margin guidance.
What Happened: The company said its third-quarter revenue will likely come in at $5.6 billion, down from the previous forecast of $6.7 billion, plus or minus $200 million. Weaker-than-anticipated PC market demand held back processor shipment, which, in turn, had an impact on the company’s client sector revenue.
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AMD also reduced its non-GAAP gross margin guidance from 54% to 50%, reflecting lower client processor unit shipments and average selling price. Additionally, the company expects to record $160 million in charges, mostly for inventory, pricing, and related servers in the graphics and client industries.
Following the announcement, sell-side analysts scrambled to lower their price targets for AMD shares.
- KeyBanc’s John Vinh reduced the price target from $130 to $100 while maintaining the Overweight rating.
- Piper Sandler analyst Harsh Kumar took down the price target from $140 to $80 but maintained the Overweight rating.
Price Action: In premarket trading, AMD shares were down 5.08% to $64.40. according to Benzinga Pro data. For the year-to-date, the stock has lost about 53%.
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Image and article originally from www.benzinga.com. Read the original article here.