Lisa Su, president and chief executive officer of Advanced Micro Devices (AMD), holds a 3rd generation Ryzen desktop processor while speaking during a keynote session at the 2019 Consumer Electronics Show (CES) in Las Vegas, Jan. 9, 2019.
David Paul Morris | Bloomberg | Getty Images
AMD shares were down more than 7% on Friday as investors digest the semiconductor’s disappointing preliminary third-quarter results Thursday that were well below its initial guidance.
The chipmaker cut its sales forecast on Thursday for the third quarter, blaming a larger-than-expected decline in the personal computer market and supply chain issues.
AMD now expects preliminary quarterly revenue of about $5.6 billion thanks to “reduced processor shipments.” That’s more than $1 billion below the $6.7 billion it had previously forecast as the midpoint of its revenue expectations for the quarter.
The company also said that its non-GAAP gross margin is expected to come in around 50%, while it had previously expected gross margin to be closer to 54%.
Several firms, including Piper Sandler, Stifel, KeyBanc Capital Markets and Mizuho Securities cut their price targets for AMD in notes to clients on Friday, though each of those maintained a buy or overweight rating.
Shares of other chipmakers like Intel and Nvidia were also down, each more than 4%, as weak PC demand and supply chain issues could weigh on other semiconductor players.
WATCH: AMD’s third quarter cut was deeper than the market expected, says Bernstein’s Stacy Rasgon