While sell-side bulls trumpeted AMD's Xbox One/PS4 ramps and the strength of certain other businesses (SeaMicro, workstation GPUs), bears focused on weak PC CPU numbers and commentary (particularly for notebooks), as well as recent gross margin declines.
Goldman (Sell) sees AMD continuing to lose ground to Intel (INTC -0.2%), which has gained notebook share this year with the help of its low-power Haswell parts, and only saw a 3% Y/Y drop in PC CPU division sales in Q3 (vs. 15% for AMD). The firm thinks AMD has ceded 300 bps of share to Intel since Q1 2012. The arrival of Intel's Bay Trail Atom CPUs could further pressure AMD on the low-end; AMD is countering with Temash.
BofA/Merrill, which cut shares to Neutral, is worried PC weakness is going to offset console-related growth. CEO Rory Read predicted on the CC PC shipments will be down 10% both this year and next (IDC/Gartner aren't quite as pessimistic for 2014).
Wedbush (Outperform), on the other hand, thinks bad news is priced in, and estimates console-related sales surged to $401M in Q3, or 28% of revenue.