Intel Corp. (NASDAQ: INTC) got some bad news last week regarding a security flaw in the chips it has been producing for at least the past two decades. And while the company’s stock has recovered somewhat since the news broke, it closed out the first week of the year as the worst performer among the 30 stocks that comprise the Dow Jones Industrial Average (DJIA), with a share price loss of 3.08%.
The second-worst performer for 2018 among the Dow 30 is Travelers Co. Inc. (NYSE: TRV), which is down 2.57% in the first week of the year, followed by Verizon Communications Inc. (NYSE: VZ), down 0.85%, and Procter & Gamble Co. (NYSE: PG), down 0.7%. These are the only four stocks that posted share price losses last week.
The Dow posted an all-time high of 25,299.79 on Friday and closed the week at 25,295.87. The index gained about 1.9% in the first week of the year.
When every one of a company’s principal product for the past 20 or so years is revealed to have a major flaw, it’s only realistic to expect the stock’s price to tumble. When word got out last Tuesday that Intel’s x86 processors had two gaping holes that could allow cybercrooks to steal personal data from any machine, the share price plunged more than 5%.
It turned out that chips based on designs from other semiconductor makers like ARM and AMD also had one of the same flaws, dubbed Meltdown and Spectre. The San Jose Mercury News explains:
Meltdown is exclusive on Intel chips and allows hackers to bypass the hardware barrier between running applications and the computer’s memory, thereby allowing hackers access to the latter. Spectre affects chips made by Intel, AMD and ARM and tricks applications to hand over secret information.
Microsoft already has issued a software patch, and Apple and Google are working on fixes for their products, including smartphones and tablets.
Intel shares dropped to a low of $42.69 on Thursday before recovering to close the week at $44.74. From Tuesday’s closing price of $46.85, the shares lost more than $2.00 by the end of the week. The stock’s 52-week range is $33.23 to $47.64, and the 12-month consensus price target is $47.08. The low target is $32 and the high target is $58.