Intel Stock Surges on Nvidia, SoftBank, US Government Backing
Shares jumped over 4% following reports of a $5 billion investment from Nvidia and a potential foundry partnership with Apple, signaling strong strategic support.
Intel (INTC) shares surged more than 4.4% in heavy trading following a series of significant announcements that signal powerful financial and strategic backing for the semiconductor giant's turnaround efforts.
The rally was ignited by reports of substantial new investments, including a and a $2 billion investment from SoftBank. These moves are seen as a major vote of confidence in Intel's strategy under CEO Pat Gelsinger, who is working to re-establish the company's manufacturing leadership.
Adding to the bullish sentiment, the US government has taken a nearly 10% stake in the company. This investment is part of the Biden administration's broader industrial strategy to bolster domestic semiconductor production through , aimed at reducing reliance on foreign supply chains for critical technology.
Further fueling investor optimism are reports that regarding a potential collaboration. While Apple is unlikely to return to using Intel processors in its products, the talks are reportedly focused on Apple utilizing Intel's growing foundry services as an alternative production source to its primary supplier, TSMC. An investment from Apple would not only provide capital but also lend significant credibility to Intel's foundry ambitions.
The combined investments and potential partnerships represent a powerful endorsement of Intel's efforts to compete in the advanced chip manufacturing sector. The collaboration with Nvidia is particularly noteworthy, as the two companies are fierce competitors in the GPU and data center markets. The partnership will reportedly focus on developing joint AI infrastructure and personal computing products.
This influx of capital and strategic support is critical for Intel as it executes its capital-intensive plan to build new fabrication plants (fabs) in the US and Europe. The developments provide a significant boost to the company's long-term vision and its stock, which has faced pressure amid intense competition and manufacturing delays in recent years.