AMD Stock Pops as Intel Suffers From ‘ZombieLoad’ Vulnerability

Intel (NASDAQ:INTC) has not exactly had a stellar few years. The company has dealt with chip delays, a resurgent Advanced Micro Devices (NASDAQ:AMD), the failure of its 5G mobile modem efforts — losing its Apple (NASDAQ:AAPL) iPhone business as part of that — and the Spectre and Meltdown crisis that kicked off 2018.

AMD Stock Pops as Intel Suffers From 'ZombieLoad' Vulnerability

Source: Graz University of Technology

Now Intel is in the spotlight once again, and not in a good way. A new vulnerability in PC processors called “ZombieLoad” has been identified by security researchers. It could allow hackers to gain access to sensitive information, including passwords and it appears that virtually every Intel CPU since 2011 is affected. The company has released yet another patch, but PCs take a performance hit from installing it.

There was little impact on Intel stock after the news of ZombieLoad broke on Tuesday, but AMD stock popped by over 4%.

ZombieLoad Comes for Intel Processors

Going back to January 2018, Intel was hit hard by the discovery of Meltdown and Spectre. These vulnerabilities — which also affected AMD and ARM-based processors — posed a huge security risk to PC users. There was potential for hackers to exploit the vulnerabilities to steal critical data. PCs were affected, but so were cloud servers and even mobile devices.

Intel must be feeling a sense of deja-vu, because once again, a critical vulnerability has been announced that affects its processors. 

TechCrunch announced on Tuesday that security researchers from Graz University of Technology have discovered a new critical vulnerability in Intel chips called ZombieLoad. This vulnerability is similar to Meltdown and Spectre in that it could allow a hacker to steal data directly from the processor. The security research team that discovered ZombieLoad describes it like this:

“While programs normally only see their own data, a malicious program can exploit the fill buffers to get hold of secrets currently processed by other running programs. These secrets can be user-level secrets, such as browser history, website content, user keys, and passwords, or system-level secrets, such as disk encryption keys.”

Like Meltdown and Spectre, ZombieLoad affects not only consumer and business PCs, but also the servers used in cloud computing. That means a big headache for companies like Amazon (NASDAQ:AMZN). What’s different this time around is that the vulnerability appears to be unique to Intel chips. According to the researchers, ZombieLoad affects most Intel CPUs released since 2011, but not processors from AMD, or ARM-based chips.  

Intel has already released patches (the company was warned by the researchers prior to the findings being published), but those come with a cost. An Intel spokesperson told TechCrunch that patched PCs could take a performance hit of up to 3%, while cloud servers could see their performance drop by as much as 9%.

An Opportunity for AMD

Given the news that hit INTC, the 4.1% pop in AMD stock makes sense. AMD has been on a tear, even as Intel has struggled. With the release of its Ryzen PC processors, AMD has begun to eat into Intel’s PC market share, going from 17.5% of PC processors in 2016 to a current 22.8% share. The company beat Intel to the new 7nm chip architecture, and late last year, AMD inked a deal with AMZN to have its new EPYC chips used in Amazon web servers.

With Amazon and other cloud service providers staring down yet another performance hit on their Intel-based servers after the ZombieLoad patch, you can bet that AMD is pushing those EPYC chips even harder. 

The bad PR Intel is receiving from ZombieLoad is likely to pay off for AMD when it comes to its Ryzen chips in the PC market as well. Overall, this latest vulnerability is just the latest bad news to hit INTC, but it’s yet another opportunity for Advanced Micro Devices to build market share and for AMD stock to grow in value.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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