Why AMD Is Poised to Keep Plunging

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, embattled chip maker Advanced Micro Devices has received a distressing two-star ranking.

With that in mind, let's take a closer look at AMD and see what CAPS investors are saying about the stock right now.

AMDfacts

Headquarters (founded)

Sunnyvale, Calif. (1969)

Market Cap

$1.7 billion

Industry

Semiconductors

Trailing-12-Month Revenue

$6.0 billion

Management

CEO Rory Read (since 2011)

CFO Devinder Kumar (since 2012)

Return on Capital (average, past 3 years)

(1.3%)

Cash/Debt

$1.3 billion / $2.0 billion

Competitors

Intel

IBM

NVIDIA


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 18% of the 3,770 members who have rated AMD believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star MrOneHundred, touched on the headwinds working in the stock's favor:

It's hard to imagine AMD driving any lower than it is presently, but with a PC dying market and tremendous competition in the microprocessor market with Intel, the last bastion of hope (IMO) is AMD's video graphics cards (which I personally happen to like). I'm sure I'll be attacked on this, but if AMD is to survive the mobile/tablet revolution (of sorts), then it will need to either cut back on some of its operations or develop products that can take advantage of the market's direction. This pick is meant for the long term. An initial climb back up is probably inevitable, but I'm not going to risk it with real cash.

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The article Why AMD Is Poised to Keep Plunging originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Intel and NVIDIA. The Motley Fool owns shares of Intel and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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