Intel shares surged 27% this week, inexplicably climbing at an unprecedented pace.
In a significant move, Intel and Nvidia have announced a partnership that could mark a critical step in Intel's revival. The tech giant, once the dominant U.S. chipmaker, has been struggling to keep pace in the age of generative AI, leading to restructuring and major layoffs.
The partnership, announced on September 18, 2025, involves a $5 billion investment from Nvidia. The semiconductor company purchased approximately 4% of Intel's shares at $23.28 per share. This investment forms part of a multigeneration partnership agreement, with Nvidia set to incorporate Intel's technology into its PC offerings and use Intel-made custom CPUs in its AI data center platforms.
The news has sent Intel's stock price soaring. Today, it closed at $30.58 per share, marking an increase of 22.81%. This surge has also propelled Intel's stock price 27% higher this week, and the company's market capitalization now stands at $143 billion.
However, the deal has raised questions about Intel's foundry business and the potential implications for it. Some analysts suggest that the partnership could lead to Intel being stripped for parts. On the other hand, Intel's CEO, Lip-Bu Tan, believes the partnership will aid in Intel's turnaround efforts.
The 52-week range for Intel's stock price remains between $17.66 and $32.38. The day's range, however, has expanded to between $30.16 and $32.37. The S&P 500 and Nasdaq-100 have also seen growth, with the S&P 500 gaining 0.7% and the Nasdaq-100 increasing by 1.5%.
Nvidia's CEO, Jensen Huang, has clarified that Taiwan Semiconductor Manufacturing Company (TSMC) will remain Nvidia's primary fabricator. This suggests that Nvidia may still make use of Intel's manufacturing capabilities for certain products.
The investment from Nvidia could be seen as a good pick for investors comfortable with risk, given Intel's potential for growth following the partnership. However, concerns about the future of Intel's foundry business and the possibility of the company becoming "a shadow of its former self," as suggested by some analysts, remain.
Only time will tell if this partnership will lead to Intel's much-anticipated revival or if it will face further challenges in the competitive tech landscape.
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