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Intel Pounded For Second Straight Day On Chip Security Issue

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Intel's ( INTC ) attempt to explain and remedy a security issue with its chips did little to assuage investors on Thursday, as the company's shares fell hard for a second straight trading session.

[ibd-display-video id=3063208 width=50 float=left autostart=true] Intel shares dropped 3.3%, near 43.75, in morning trading on the stock market today . On Wednesday, Intel stock fell 3.4% to 45.26, ending the day above its 50-day moving average, a key support level. But the stock sliced through that level on Thursday.

Late Wednesday, Intel confirmed news reports of a security issue related to its central processing units and said it is working with other chipmakers and operating system companies to develop an industry-wide approach to resolve the issue.

Intel took issue with news reports that described the security problem as a "bug" or "flaw" and that it is somehow unique to Intel. Rival Advanced Micro Devices ( AMD ) countered that claim, saying its chips have "near zero" vulnerability to the issues uncovered by researchers because of differences in the architecture of AMD chips.

AMD shares were up 5.9%, near 12.25, in morning trading. On Wednesday, AMD rose 5.2% to 11.55.

The Intel security issue could allow hackers to gather sensitive data from the memory of computing devices, but they would not be able to modify, delete or corrupt data through the exploit, Intel said.

Software and firmware patches to fix the issue could slow down computer processes, but Intel said the effect would be minimal for the average user.

IBD'S TAKE:For the latest news on chip stocks, visit IBD's news page Chip Stocks To Watch And Semiconductor Industry News .

On a conference call with analysts, Intel executives said they do not expect the security issue to have a financial or business impact on the company.

"Intel's conference call leads us to think that while certainly headline grabbing, the impact from this should be manageable/limited," RBC Capital Markets analyst Amit Daryanani said in a report. "Key will be if Intel peers (AMD and others) demonstrate that this issue is unique to Intel or performance penalties are more severe at Intel vs. other solutions; it could result in share impact."

Daryanani rates Intel stock as sector perform with a price target of 44.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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