Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip maker Advanced Micro Devices (NYSE:AMD) has received a distressing two-star ranking.

With that in mind, let's take a closer look at AMD's business and see what CAPS investors are saying about the stock right now.

AMD facts

Headquarters (Founded)

Sunnyvale, Calif. (1969)

Market Cap

$6.54 billion



Trailing-12-Month Revenue

$4.92 billion


CEO Derrick Meyer

CFO Thomas Seifert

Trailing-12-Month Return on Capital



$2.5 billion / $5.7 billion

1-Year Return






CAPS Members Bullish on AMD Also Bullish on


CAPS Members Bearish on AMD Also Bearish on

Ford Motor (NYSE:F)


Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 18% of the 764 All-Star members who have rated AMD believe the stock will underperform the S&P 500 going forward. These bears include GunnarVagotis, who is ranked in the top 5% of our community, and the top-ranked member in all of CAPS, UltraLong.

Last month, GunnarVagotis warned that Mr. Market was getting too excited over the recent $1.25 billion gift from Intel: "[A] legal settlement is not a reliable revenue source. [S]oon the party will be over and this stock will get adjusted down to where it belongs."

In a pitch from yesterday, UltraLong also urged Fools to bet their chips elsewhere:

I am in utter disbelief that this managed to get to $10 given just how terribly this company has been running lately.

AMD has net negative book value stemming largely from what can be at best 2 billion dollars plus in net debt. AMD couldn't find a profit if they had a treasure map of which rock it was under and there was one rock on the beach. They consistently are outperformed by Intel, their management has positioned them for failure, and I can see no other method of creating cash here than by selling more dilutive stock. No tangible profits until at least mid 2011 by my estimates so I'd like to know how far people are really looking when valuing AMD...2012?

Either way, the cooling fan has been turned on and this processor is about to get a healthy pullback.

What do you think about AMD, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara doesn't own a position in any of the companies mentioned. Google is a Motley Fool Rule Breakers selection. Apple and NVIDIA are Stock Advisor picks. Intel is a choice of Inside Value, and Motley Fool Options recommends buying calls on it. The Fool's disclosure policy always gets a perfect score.