AMD stock is up nearly 400% over the last 12 months as the company continued to surprise investors and analysts with its results, but issues with the new Ryzen chips now threaten to derail all that progress. The shares haven’t fallen very much despite those problems, which is interesting given how much the Ryzen processors have positively impacted Wall Street’s view of the chip maker. On the other hand, the nature of the problem sounds like something that will not have any widespread impact on users of the chips.

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But even though AMD stock hasn’t plunged, short interest in the name has climbed to a new record high.

AMD confirms problems with Ryzen chips

Advanced Micro Devices confirmed earlier this week that its Ryzen 7 processors are locking up some PCs that are running certain code, although it is working on a fix. The company said PCs that are running FMA3 code are affected and clarified in a statement to PCMag that the problem was only seen “in a single instance of user-built FMA3 stress test code built for Haswell-generation CPUs.” It also emphasized that there have been no reports of these problems with the Ryzen problems in “real applications.”

FMA3 code is used in very specialized software that’s used to benchmark PCs and see how fast they are. Given that the issue is only related to benchmarking software and, on top of that, benchmarking software that was customized and designed to test Intel chips, it seems unlikely that the average user will encounter issues with the Ryzen chips.

However, AMD added that it’s identified the root cause and will send BIOS changes to motherboard vendors to fix the issues.

Short-sellers boost interest in AMD stock

Despite the probability that these issues won’t affect most users, short-sellers are seeing them as a bad omen for Advanced Micro Devices at a critical time when it’s trying to pull market share from Intel. According to Ihor Dusaniwsky, head of research at the financial analytics firm S3 Partners, analysts consider AMD stock overbought and have an average target price of $11.50 per share.

He adds that short interest in the name reached $1 billion in January, the first time it has been that high since October 2007. Today, AMD short interest rose to $1.55 billion, representing a 55% increase year to date. According to Dusaniwsky, short-sellers have been active in AMD stock since November when it closed in on $10. He said $900 million in new short sales since then have boosted short interest in AMD stock by 141%.

High conviction among short-sellers in AMD stock

He explained that in the event of a plateau or decline in AMD stock, investors who are long might start taking profits to lock in the massive gains they’ve gotten over the last 12 months. This is exactly what short-sellers are betting on, especially as the issues with the Ryzen chips could set the stage for at least a temporary pullback in the name.

Dusaniwsky describes conviction among AMD short-sellers as “very high” because interest is still rising even though they have incurred $1.02 billion in mark to market losses, net of financing, between 2016 and 2017, resulting in a staggering return of -167.47%.

He wrote in a note: “We may be at a tipping point for AMD — if its stock price continues to increase, shorts may cut their losses and be squeezed out of their trades, but if AMD’s stock price begins to drop, we may see short interest explode as AMD slides down to the analysts’ target price of $11.50.”

Shares of AMD stock declined by as much as 0.15% to $13.77 during regular trading hours on Friday.

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