AMD’s stock plunges to biggest loss in over 12 years

In recent news this week shares of Advanced Micro Devices Inc. plunged on heavy volume Tuesday, to suffer their worst day in over 12 years, as the chipmaker’s results didn’t live up to analysts’ high hopes.

The company reported late Monday first-quarter results that were mostly in line with expectations, but analysts expressed concern over the margin outlook. With the stock more than tripling over the past year, Wall Street had set the bar very high.

The stock AMD, -24.23% tumbled 24.4% to $10.30, the lowest close since Jan. 23, 2017. That’s the biggest one-day percentage decline since it plummeted 26.2% on Jan. 11, 2005. Volume rocketed to 266.6 million shares, which was more than five-times the full-day average and enough to make the stock the most actively traded on major U.S. exchanges.

Analyst Christopher Rolland at Susquehanna Financial said AMD needed to have a “near perfect” quarter to justify the recent ramp up in share price, but the results fell a bit short. “AMD’s new products are beginning to accelerate growth, but perhaps without all the gross margin benefits we had hoped for,” he wrote in a note to clients.

Rolland kept his rating at neutral, and his stock price target at $12, which is now about 17% above current levels.

UBS analyst Stephen Chin affirmed his sell rating on the stock and $9 price target, which calls for a further selloff of about 13%, on concerns that the margin expansion story could take more time to develop.

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This release was published on openPR.