Advanced Micro Devices (NYSE: AMD), the arch competitor of fellow chip maker Intel (NASDAQ: INTC), continues to be nothing more than a short-sale candidate. Its Q4 was horrible. Net sales nosedived 33% on a year-over-year basis, coming in at roughly $1.2 billion. On a GAAP basis, the net loss from continuing operations was $2.32 per diluted share versus $2.24 per diluted share in Q4 2007. According to this source, on an adjusted basis (which excludes write-downs related to the ATI transaction), the loss was $0.69 per share, and that missed Wall Street's expectations by a wide amount. The call was for a loss of $0.54 per share.

AMD is in a terrible state. Sure, it's not necessarily all management's fault. What can they do about the sinking economy? Not much. Demand is down and everyone is going to have to live with it. The press release talks about lack of visibility and concentration on restructuring. That translates to "we're doing everything we can just to make it through the tough times." Gross margins, both on a GAAP and a non-GAAP basis, have been challenged. Considering the bad news recently reported by both Intel and Microsoft (NASDAQ: MSFT), it's not a stretch to say that shares of AMD are heading lower.

Although I alluded to shorting AMD at the top of this piece, I should point out that shorting is a risky proposition and not for everyone. My main point in saying this is that I believe the situation is so dark right now in this sector of tech that 52-week lows may certainly be retested. And then there is the price war between AMD and Intel that this article mentions. That's an important issue to consider when thinking about both of those companies. The worst of times brings out the fiercest of competitive natures. Since AMD's brand is arguably not as strong as the Intel name, one can see why it would be best to avoid AMD's stock at all costs.

Disclosure: I don't own any company mentioned; positions can change at any time.