Investors in technology stocks will know that the market can be highly volatile, even as tech followed an upward trend in 2017. While the market as a whole has still been performing strongly, Intel (INTC) has had a rough start to 2018. Stock dropped earlier this week after news broke that Intel’s processors released in the last ten years could be hit with a serious performance boost, after a critical security flaw was discovered.
Intel’s one-month peak on the Nasdaq was $47.56 USD per stock, which was more than $10 up from where stocks started at the start of 2017. The company had a shaky year where they saw increased competition from rival AMD, but managed to gain some value back at the end of 2017.
Intel Stock Value Sheds up to $3 in the First Week of 2018
In early January, those gains were quickly undone as news broke that a critical security flaw existed in Intel’s CPU designs. The flaw meant that malicious software could access critical areas of an operating system, and Intel was not able to correct this flaw through CPU firmware. Instead, operating systems would need to update their kernels, with Microsoft Windows, Linux, and MacOS platforms all being impacted. The necessary changes would mean a potential 30% performance decrease on many of Intel’s CPUs from the last decade, and the news didn’t go down well within the tech community.
When investors learned about the flaw, selloffs followed, and stocks plummeted by up to $3 per share in the past week. The market was hit harder when intel CEO Brian Krzanich offloaded around half of his held stock in the company.
Intel said in a press release that “Brian’s sale is unrelated. It was made pursuant to a pre-arranged stock sale plan, with an automated sale schedule. He continues to hold shares in-line with corporate guidelines.”
Despite the selloff being a pre-arranged move, it didn’t go down well with investors, and there is still some hesitation in the market. Intel’s stock has recovered slightly to close off Thursday trading at $44.32 USD, but we’re yet to see the full impact of the security flaw, which could continue to make Intel an unstable investment throughout 2018.
Security Flaw: Intel Should Recover in the Long Term
Intel traditionally performs well and holds a near monopoly on the mainstream CPU market. Their only real competitor, AMD, is currently trading at $12.22 on the Nasdaq. AMD experienced a slight uplift on the news of Intel’s woes, but this hasn’t translated to any significant gains.
Investors could purchase Intel stock now and reasonably expect growth throughout 2018, however, this most recent drop shows that the even strongly performing tech stocks can be just as volatile as any other. An investment in Intel should only be made after careful consideration, and should be part of a comprehensive investment portfolio.
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