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[Kenswift]

This is why I won't hold through earnings.

Goldman Sachs downgraded AMD (NYSE: AMD) from Neutral to Sell with a price target of $2.50, suggesting 43% downside. The firm said the market is pricing in too much for gaming.

In the downgrade report, firm notes that, like it has many times in the past despite a precipitous decline, AMD once again rallied and is up 83% YTD amid enthusiasm for gaming. While the published consensus likely needs to increase for gaming, Goldman's James Covello said, "even with gaming, AMD trades at 22X our new 2014E EPS as gaming only partly offsets secular challenges in the PC business (we estimate it is 45% of 2013 sales)."

He continued, "As has been the case with many of the other rallies in AMD, which have all faded, ultimately, the numbers do not justify the move in the stock, in our view. We believe this will again be the case as we expect continued disappointing results in the PC segment to mitigate the impact of increased revenue from gaming."