Advanced Micro Devices sells off big today on Q3 data

Not only did AMD lose a lot less than expected, but it also scored a victory on the gross margin front, at least on a sequential basis. The non-GAAP gross margin was 41% in the third quarter according to the actual press release; the metric was equal to 29% in the previous quarter.

So, why such a big move to the downside? Well, going back to that Reuters article, we see that the Globalfoundries spinoff may be exerting a negative effect. Then there's the possibility that this might be a case of simple profit-taking. Also, this source questions the quality of the guidance.

I think the sell-off may have been overdone today. I'm not saying AMD had the greatest quarter ever, and I'm certainly not about to state that AMD is the best chip maker out there. Quite frankly, Intel Corporation (NASDAQ: INTC), which reported earlier in the week, would be more my style in terms of investment ideas in this sector.

Nevertheless, AMD could be a trade now. If it continues to experience sequential improvement, then the institutions on Wall Street will probably take notice and buy accordingly. I'm not overly bullish on this company, but I can't help thinking that the shares will eventually rebound from today's carnage, thus creating an opportunity. Be sure to perform your own due diligence before acting.

Disclosure: I don't own any company mentioned; positions can change without notice.