Advanced Micro Devices, Inc. (NASDAQ: AMD) reported its fourth-quarter earnings Tuesday after the market close as break-even for earnings per share and $1.24 billion in revenue against Thomson Reuters consensus estimates of $0.01 in earnings per share and $1.24 billion in revenue. The fourth quarter from the previous year had $0.06 in earnings per share and $1.59 billion in revenue.

The company gave guidance for the first quarter as a decrease in revenue by 15%, plus or minus 3%. There are consensus estimates of -$0.01 in earnings per share and $1.20 billion in revenue.

Wells Fargo recently weighed in on the semiconductor sector and its outlook for 2015. Overall the firm is strong on the fundamentals for the new year, and Advanced Micro Devices is one of the frontrunners. The top large cap stock is Intel Corp. (NASDAQ: INTC) while AMD takes a top spot among the small caps. Both are rated Outperform.

Continuing to evaluate the sector, Wells Fargo expects chip growth to accelerate through 2015 and grow in a range of 8% to 12% for the full year. This is potentially two to three times the 2015 3% to 5% growth projections of various market research organizations, such as WSTS and Gartner, and is comparable to or slightly higher than the 9% to 10% growth of 2014.

The Computing and Graphics segment revenue decreased 15% sequentially and 16% from the previous year. This was primarily due to lower desktop processor and GPU sales. The annual decrease was driven by lower desktop processor and chipset sales.

Enterprise, Embedded and Semi-Custom segment revenue decreased 11% sequentially driven by lower sales of semi-custom System-on-Chips (SoC). However annual revenue increased 51% from 2013 driven by these same sales.

Dr. Lisa Su, President and CEO, said:

We made progress diversifying our business, ramping design wins and improving our balance sheet this past year despite challenges in our PC business. Annual Enterprise, Embedded and Semi-Custom segment revenue increased over 50% as customer demand for products powered by our high-performance compute and rich visualization solutions was strong. We continue to address channel headwinds in the Computing and Graphics segment and are taking steps to return it to a healthy trajectory beginning in the second quarter of 2015.

Shares of AMD closed Tuesday down 6% at $2.24, after hitting a 52-week low in the trading session. Following the release of the earnings report, shares were up almost 2% at $2.28. The company’s stock has a consensus analyst price target of $3.11 and a 52-week trading range of $2.35 to $4.80. It has a market cap of roughly $2 billion.

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