After failing to hold a rally above the $32.50 level throughout the summer, Advanced Micro Devices (NASDAQ:AMD) closed at $28.72, firmly below the $30 support line. Reports that AMD will delay the Ryzen 3950X launch date is not a fundamental concern but markets need an excuse to put selling pressure on the stock.
The Ryzen 3950X processor is on 7nm and has 16 cores. The Ryzen 3000 series has a posted processor speed is apparently lower than the posted speed, by as much as 200Mhz. The 3950X, which is the most binned out of all the Ryzen 3000 chips, may have the same problems. So, fixing the production problems is critical for AMD to maintain its technological lead over Intel (NASDAQ:INTC). The 16-core CPU has an MSRP of $750, well below the $1,000 price the HEDT chips Intel asking for.
The delay is not serious because AMD is in no rush to release the chip. It is already busy launching the 7nm line-up of mainstream Ryzen CPUs. It may afford to take the time to refine the chip’s release. With strong demand for the 3950X, AMD will fire on all cylinders. Its EPYC is in full swing, the Threadripper 3 will be released next, and the refreshed GPU product will keep AMD busy.
AMD shares are in danger of falling to the $26 level next. Investors who missed the rally at the beginning of the year may consider picking up a few shares.
