Advanced Micro Devices (NASDAQ:AMD) is hurting today. Shares of the microprocessor designer plunged in Monday's after-hours session, setting new 52-week lows in the process. AMD stock opened 17% lower on Tuesday.

The kicker? AMD's dramatic drop follows news that should have been baked into the stock price all along. Investors just forgot all about it, distracted by rumored buyout talks and Father Time.

Right after Monday's closing bell, AMD published an update to its second-quarter guidance figures. And it was all bad news.

Second-quarter sales are now expected to fall 8% sequentially, which works out to roughly $950 million. AMD's original guidance pointed to a smaller 3% drop, or $1.0 billion. Either way, it's a big move from the year-ago quarter's $1.4 billion in total revenue.

At the same time, adjusted gross margin targets were reduced from 32% to 28%. A year ago, that margin sat at 35%.

Amd

Image source: AMD.

To explain these reduced expectations, AMD pointed to weak demand for PC systems. The more profitable enterprise, embedded, and semi-custom division accounted for 48% of AMD's sales in the first quarter. That portion will grow in the second period, which should help buttress AMD's margins, but that effect isn't strong enough to overcome the loss of PC-market sales volume.

Moreover, AMD will record a one-time charge of $33 million to account for several product designs moving onto the more advanced FinFET manufacturing process.

If you're wondering how long the design lead times can be in the semiconductor industry, let me point out that AMD first announced its FinFET ambitions 13 years ago, and is only now taking advantage of this hyper-efficient design method. What once was seen as a "ten-fold performance leap" is now just another incremental step in the evolution of processor designs. This stuff takes time, people.

But let's get back to the present day. Or rather, to the magical far-away haze of two weeks ago.

That's when memory chip producer Micron Technology (NASDAQ:MU) announced terrible second-quarter results and equally weak forward guidance, all due to a soft PC market. As investors digested this hard-hitting prognosis, Micron's shares fell 22% over the next two trading days. AMD followed suit with a 9% plunge of its own. Even industry titan Intel (NASDAQ:INTC) took that news on the chin, as shares lost 5% of their value.

Intel and Micron have stayed down since that fateful report, but AMD hasn't. According to the rumor mill, Microsoft (NASDAQ:MSFT) weighed buying out AMD to gain control of the Xbox One's central processor technology (which also underpins the PS4 and Wii U rival systems). The buyout looks like a bad idea for Microsoft, and even if these talks are real, they're not likely to result in an AMD buyout.

Still, the mere hint of a positive exit strategy was enough to hold AMD shares aloft. As of Monday night, the stock had rebounded nearly 6% from the darkest hours of Micron's PC industry revelations.

The Microsoft buffer is all gone now and then some. Again, AMD is trading at multiyear lows this morning. AMD is set to report full results on July 16, the day after Intel's second-quarter update. After these two announcements, we'll know a lot more about the overall health of the PC markets -- and it won't be a pretty picture.

But you can't say that Micron didn't warn you. AMD only underscored what we had already been told.

Anders Bylund owns shares of Intel and Micron Technology. Yeah, ouch.The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple.

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