AMD Shares Hit Five-Year Low

AMD is due to report its second quarter on July 17. Analysts polled by Thomson Reuters expect the company to post a net loss of 51 cents a share on sales of $1.45 billion.

While pre-earnings jitters are no doubt affecting AMD's stock, one hedge fund manager says the shares are also simply reflecting the grim nature of the overall market. On Wednesday the S&P 500 index declined to 20% from its peak.

"I think honestly you've got a lot of funds in big trouble and they're winding up positions, making some pretty nasty [stock] moves in both directions," says the hedge fund manager.

Adding fuel to the fire are the stop-loss measures in many funds charters, which he said forced them to sell certain stocks if shares decline by a certain level, such as 20% or 25%.

"I'm doing that today with a lot of names I don't want to sell," he says.

AMD's stock is down 70% from its 52-week high of $16.19.

A slew of self-inflicted problems, including delays in releasing its Barcelona microprocessor last year, as well as intense competition with Intel, have wreaked havoc with AMD's financials and pounded its stock price.

With the Street still waiting to see the first signs of progress from AMD's turnaround efforts, the stock's new low could represent either an attractive entry point or another milestone in a long slide.