UPDATE: Citigroup Downgrades Advanced Micro Devices to Neutral Slowing PC Demand

Citigroup reduced its rating on Advanced Micro Devices

from Buy to Neutral, both High Risk, and reduced its price target from $6.50 to $4.25. Citigroup noted, "On a long-term basis, the company is re-positioning to offer “semi-custom” solutions to better meet the needs of customers who would like a better-integrated CPU solution. We suspect first evidence of this will be in gaming systems in 1Q13. Meanwhile, AMD is embarking on an ambidextrous strategy, suggesting they are open to new architectures (i.e. ARM) should customer demand warrant. Nearer-term, we see increasing risks from slowing PC demand given their PC client business accounts for a proportionally larger share of revenue relative to Intel. Advanced Micro Devices closed at $3.75 on Wednesday.