AMD Shares Plunged: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Advanced Micro Devices (NYS: AMD) slumped nearly 17% in early trading today on more than double the average volume. Last night, the semiconductor supplier cut its third-quarter revenue forecast.
So what: Management now expects revenue to grow 4% to 6% in Q3, down from earlier estimates of 8% to 12%. AMD said that issues with manufacturing chips at 32 nanometers via its main supplier, Globalfoundries, cut into supply and thereby reduced its short-term revenue opportunity.
Now what: Interestingly, AMD isn't the only chip supplier to reduce guidance recently. Texas Instruments (NYS: TXN) disappointed analysts in June when Nokia (NYS: NOK) came in light on its orders for TI chips. So while the news from AMD isn't good, it's better to be short on supply than begging for demand. Do you agree? Would you buy AMD's stock at these levels? Please weigh in using the comments box below.
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At the time thisarticle was published Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Texas Instruments. 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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