Shares of Advanced Micro Devices Inc. (NASDAQ: AMD) surged in early trading on Wednesday after a report from British tech website Register that Intel Corp. (NASDAQ: INTC) processors have a security flaw making operating systems vulnerable to hackers.
Register reported Tuesday that some Intel processors have a "fundamental design flaw" that will spur a significant security update of Linux and Microsoft Corporation (NASDAQ: MSFT) Windows operating systems to work around it, which may slow older machinery by as much as 30 percent.
The bug allows some software gain access to parts of a computer’s memory that are set aside to protect things like passwords. All computers with Intel chips from the past 10 years appear to be affected, the report said.
“This is a black eye for Intel and a natural beneficiary is AMD in the arms race on the chip side,” said Dan Ives, head of tech research at GBH Insights. “Especially as you’ve seen an ultracompetitive environment with a slowing traditional PC chip cycle, this is a step back, this is a potential PR nightmare. They need to get ahead of this and try to contain any of the damage to customers as well to the brand."
AMD shares surged as much as 7.2 percent to $11.77 Wednesday. Intel fell as much as 3.8 percent, the most since April, to $45.05. The Register cited an AMD employee who implied that the company’s chips were not affected, while an Intel spokesman declined to comment. Intel shares rose 27 percent in 2017 versus AMD's stock 9 percent decline.