Now is a crucial time for Advanced Micro Devices (AMD) as it seeks to gain CPU (central processing unit) market share from Intel (INTC). AMD’s Ryzen helped it win back customer’s confidence after a series of delays. AMD stock, sensitive to the success of new products, has risen by a mid-to-high-single-digit percentage on new product launches and market share gains.

It has been two months since AMD’s Ryzen 3000 series CPU launch, and many users state that their new Ryzen CPUs can’t hit the boost clock speed AMD claimed. In a survey of 2,700 Ryzen 5 3600 users, YouTuber der8auer revealed on September 1 that only 50% could achieve the advertised boost clock speed. Despite the boost clock issue, AMD’s Ryzen still beats its Intel counterparts in terms of performance.

Risk of false advertising

Should investors worry about AMD’s boost frequency issue? The answer is yes.

The Ryzen 3000 boost clock issue exposes AMD to the risk of a lawsuit for false advertising. AMD can’t afford such news as it seeks to build consumer confidence. Overpromising and underdelivering aren’t wise moves in the competitive CPU market.

On August 27, AMD paid $12.1 million to settle its four-year-long Bulldozer lawsuit. In 2015, several users sued AMD for reportedly misleading them by advertising Bulldozer as the “first native eight-core desktop processor.” AMD stated that four Bulldozer modules with two CPU cores each constituted an eight-core processor. However, customers argued that the Bulldozer did not feature eight independent cores. As the cores shared resources, customers thought they should be considered subprocessors.

ExtremeTech’s Joel Hruska suggests that the “lawsuit was never grounded in a technical argument over the definition of a CPU core.” He adds that there are many other CPUs with cores that share resources that consumers haven’t taken legal action against. Furthermore, Hruska points outs that AMD priced its high-end Bulldozer FX-9590 CPU at $229. That price is far below the $1,000 price tag on Intel’s equivalent eight-core Broadwell CPU. After the lawsuit, AMD lost market share to Intel.

AMD stock sensitive to new products’ success

As AMD’s Ryzen gains PC CPU market share from Intel, the company can’t afford to lose consumers’ confidence. On fears of a false advertising lawsuit, AMD stock fell 2.8% last week (ended September 6). The company is addressing the boost clock issue with a BIOS update. Once AMD resolves the issue, its stock could rise again.

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