Lisa Su, president and CEO of Advanced Micro Devices (AMD), holds a third-generation Ryzen desktop processor as she speaks 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 fell more than 7% on Friday as investors digested the semiconductor’s disappointing preliminary third-quarter results on Thursday that were well below its initial guidance.
The chipmaker cut its third-quarter sales forecast on Thursday, blaming a bigger-than-expected drop in the personal computer market and supply chain problems.
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 its non-GAAP gross margin is expected to come in at around 50%, while gross margin was previously expected to be around 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 maintained a buy or overweight rating.
Shares of other chipmakers com Intel i Nvidia were also down, each around 4%, as weak PC demand and supply chain issues could weigh on other semiconductor players.
WATCH: AMD’s Q3 cut was deeper than market expected, says Bernstein’s Stacy Rasgon
