What happened
Shares of Nvidia (NASDAQ: NVDA) ended Friday's session down to the tune of 3.3%, outpacing the overall market's setback of around 1%. While much of the stock's weakness can be chalked up to the exaggerated weakness tech stocks typically suffer against a marketwide bearish backdrop, know that Nvidia may have been also been targeted specifically because it's facing a unique cybersecurity matter that's coming to a head today.
So what
It's complicated, but here's the short version of the long story. Computer graphics technology company Nvidia was hacked late last month. A hacking outfit called Lapsus$ reportedly cracked the company's digital security to steal a variety of internal information including specific coding information that powers its graphics cards. Except, Lapsus$ doesn't want money. The hackers instead want Nvidia to offer a software update that removes restrictions on its hardware that limits how quickly the company's graphics cards can mine the cryptocurrency Ethereum.
Image source: Getty Images.
The deadline for making that update is today. As of 4:30 p.m. ET Friday, Nvidia had not made any public response regarding its decision regarding the hackers' demands.
Now what
It's possible that update is being made available without any official notice from the company. It's also possible that Nvidia's counter-hacking efforts have been effective. Broadly speaking though, those are chances that more than a handful of Nvidia shareholders weren't willing to take heading into the weekend. The escalating conflict in Ukraine of course only adds to the degree of worry investors are currently entertaining.
The thing is, for long-term investors this drama shouldn't impact any decision to buy or sell this stock. Nvidia's cyberattack defense is sure to be effective, and to the extent it can't prevent Lapsus$ from moving forward with any of its threats, the company's resources are tremendous. While this saga has already proven to be a bit of a headache, with the stock down more than 30% just since November's peak, there's arguably more upside than downside for the stock from here.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool owns and recommends Ethereum and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
