Over the last few days Advanced Micro Devices, Inc. (NASDAQ:AMD) has fallen over 12% in value. A lot of speculation has been made as to the reason for this with a fair amount being based on the release of the new Ryzen chip set. The reviews for Ryzen so far have been mixed with great price to CPU performance figures however some reviewers are stating lower than expected results in real world situations (namely gaming). That said despite this fact the Ryzen chips are re-markedly cheaper than it’s closest competitors from intel with their top end products being roughly half the price of Intel’s similar offerings.
This dramatic price difference is certainly going to be putting pressure on Intel, likely leading to lower prices from Intel in the near future and a subsequent squeeze on the profit margins Intel is currently seeing in this market segment.
So the question really is whether the launch and mixed reviews of the Ryzen chipset’s by AMD is the real reason or if there is another cause.
One other potential situation is just a natural pull back on the price due to the meteoric rise over the last few months. Despite the fact that AMD has fallen nearly 13% over the last two days it’s roughly at the exact same price it was less than 3 weeks ago and still double what it was 4 months back.
As stocks rapidly increase in price there are bound to be short term pull backs as investors try to grab some of the recently acquired “cash” off the table. This in and of itself doesn’t always signal a sell off and may even be another step towards breaking through upper resistance on the way to new highs. The question is whether or not this is one of those situations or not.