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Goldman Sachs today added Advanced Micro Devices (NYSE:AMD) to its least-favorite tech stocks list.

As part of something it calls the Goldman Sachs Technology Framework, the firm maintains lists of its favorite growth stocks and value stocks, and a list of its least-favorite stocks. The lists are updated monthly. In the latest update, issued this morning, there was just one change: the addition of AMD to the five-stock least-favorite list, replacing Hewitt Associates (HEW) (which it still rates Sell, by the way).

In a note on the lists this morning, Goldman indicated that it expects AMD’s December 14 meeting with analysts “to serve as negative catalyst for the shares.” In particular, the concern is that the company could lower its “implied guidance” for the fourth quarter, and/or reduce its target model.

One issue: weak microprocessor demand, and continued price erosion. “Our weekly microprocessor pricing tracks continues to show a general deterioration in CPU pricing in recent weeks, which we believe is likely to contribute to weaker than expected margin performance in [the fourth quarter],” Goldman writes. The firm adds that AMD Opteron 280HT pricing was down 32% in the latest period, “likely in response to continued traction from Intel’s Woodcrest platform and the recent launch of the Intel (NASDAQ:INTC) quad platform.” Notebook processor pricing has also been weak, Goldman says.

Meanwhile, Goldman also sees potential issues with the integration of the recently acquired graphic chip producer ATI Technologies (NYSE:ATI). “We beleive the acquisition is likely to be dilutive to the company’s grossmargin given ATI’s gross margin profile in the low 30% range versus AMD’s gross margin in the 50% range,” the firm says. “As a result, we believe the target model is likely to come in below original expectations, driven by the combination of the inferior gross margin profile of ATI and a continued deterioration in industry fundamentals (i.e., pricing) since the company’s original guidance.”

The bottom line: “We would expect some incremental downside in the shares post the company’s analyst meeting in December.”

Here are the current Goldman Tech Framework Lists:

Favorite Growth Stocks:

* Apple (NASDAQ:AAPL)
* Cognizant (NASDAQ:CTSH)
* eBay (NASDAQ:EBAY)
* Google (NASDAQ:GOOG)
* Research in Motion (RIMM)

Favorite Value Stocks:

* Hewlett-Packard (NYSE:HPQ)
* Microsoft (NASDAQ:MSFT)
* Symantec (NASDAQ:SYMC)
* Verigy (NASDAQ:VRGY)
* Western Union (NYSE:WU)

Least-Favorite Stocks:

* Advanced Micro Devices
* CSG Systems (NASDAQ:CSGS)
* Red Hat (RHAT)
* Teradyne (NYSE:TER)
* Unisys (NYSE:UIS)

AMD shares today are down 41 cents at $21.16 for a loss of almost 2%.

AMD 1-yr chart:

AMD 1-yr chart

Source: Goldman Adds AMD To Its Least-Favorite Tech Stocks Citing Challenges from Intel, with ATI Integration