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What: Shares of embattled chip maker AMD (NYSE: AMD ) sank 14% today after its preliminary third-quarter results disappointed Wall Street.
So what: AMD is just the latest in a string of PC component manufacturers that have been hurt by a weak economic environment, as well as a rapid shift toward smartphones and tablet computers. Today's downbeat guidance also suggests that AMD continues to struggle with market-share losses to chip gorilla Intel (Nasdaq: INTC ) , giving Wall Street little reason to be optimistic over its turnaround prospects.
Now what: Management now expects third-quarter revenue to decline 10% sequentially, much worse than its previous forecast of only a 1% drop. "I used to think that AMD would make it back to the big stage, and that the stock should be worth about $10 on that basis," Foolish tech expert Anders Bylund wrote yesterday. "Now, the risks outweigh the opportunity." Given the economic, secular, and competitive headwinds working against AMD, it's tough not to agree.
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