AMD stock slides as security issues rock the tech sector

by | 12 Jan, 2018

Nordstrom Kohl's Target Macys

New bugs may expose private data stored in a chip’s memory to hackers

Advanced Micro Devices (AMD) is the latest tech company to see its shares fall substantially after revealing security issues with its chips.

AMD stock fell 4 per cent in after-hours trading on Thursday after the company announced its chips were being affected by a major security vulnerability, the week after the company said the products were at “near zero” risk for being affected by such threats. This Friday the stock is still under pressure, down 1.64 per cent in early trade.

The risks arise from 2 key bugs which can take advantage of a processor, named Spectre and Meltdown. These threats represent 2 of the most fundamental flaws in computer processor designs in the past 20 years, with both using code that can allow attackers to access memory without permission giving them the chance to gain secret information like passwords.

In an interview with Yahoo Finance yesterday, AMD CEO Lisa Su said: “Security is incredibly important to us as a processor company, and we’re absolutely all over this.”

On Meltdown, Su said: “To clarify, for Meltdown, AMD is not susceptible,” she added, “We don’t have susceptibility to that variant. But with Spectre, AMD is susceptible.”

Another major US tech firm Intel Corp saw its stock drop earlier in the month after also admitting that its chips had a vulnerability that would require software patches to fix. Shares saw their worst day for 8 months as traders dumped the stock, while Intel was quick to try to implicate other chipmakers including AMD, saying that they too could suffer from the same problems.

MarketWatch columnist Therese Poletti said: “The entire tech industry is now working on how to deal with a design flaw written into the heart of computers made in the past 20 years in an effort to make processors work faster. But the biggest arena of impact could be the server market, where fixes could slow down computers, hurting companies like Amazon, Microsoft and others offering cloud services with low latency and fast processing while hosting the data centres of other companies.”

There may be further nasty surprises on the way for investors in major chip makers.

Related: Samsung predicts major gains. Alibaba seeks HK listing. North Korea extends olive branch.

Nordstrom Kohl's Target Macys

Intel stock slides amidst broader concerns for chipmakers in the tech space

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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