Shares Tumble as Bank of America Downgrades Advanced Micro Devices Amid 'Weak' Guidance

In a note released early Friday morning, Bank of America analyst, VIvek Arya downgraded shares of Advanced Micro Devices, Inc.

from Neutral to Underperform following yesterday's release of its second quarter results and third quarter guidance. Additionally, Arya has cut the price objective from $4.50 to $4. "While management has done a good job of strengthening the balance sheet and winning critical business with major console customers, we believe the legacy PC/graphics market continues to be a material headwind," wrote Arya In addition to legacy PC/graphics, Arya says Advanced is suffering from "negligible" exposure to enterprise PC and some growing class of consumer PCs, i.e. Chromebook. Looking to third quarter guidance, Arya noted the company is forecasting $1.47 billion in sales compare to consensus expectations of $1.57 billion and a roughly flat second half for console units compared to the first half. This again is a disappointment, as the Street was looking for a ramp in the second half. Following the Bank of America downgrade, shares of Advanced Micro Devices have dropped ~$0.80 or ~18 percent in Friday's pre-market session.