Nvidia Just Gave Intel a Vote of Confidence. Will That Keep Intel’s Stock Rising?
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A $5 billion investment from Nvidia and pledge to co-develop chips for data centers and PCs sent Intel shares soaring Thursday
Is a deal with AI darling Nvidia enough to win investors over to Intel’s stock?
A $5 billion investment and a promise to co-develop chips for data centers and PCs from the chip designer at the heart of the AI boom sent Intel (INTC) shares soaring 22% to around $30 Thursday. That brought the stock to levels not seen since July 2024, before a wider-than-expected loss and massive restructuring plan announced that August dealt a blow to investor confidence and sent its stock reeling.
Roughly a year later, the struggling chipmaker has welcomed a new CEO, laid off workers, and struck a deal with President Donald Trump to sell the government a 10% stake. That inspired enough confidence to bring the stock up 24% this year heading into Thursday’s session.
Today’s Nvidia-fueled (NVDA) momentum has Intel’s year-to-day gains above 50%. Some analysts now think the momentum could mark a turning point in sentiment for the stock, which Wall Street has largely viewed with caution and currently sits at around half of its 2021 highs. All 11 analysts tracked by Visible Alpha held “hold” ratings for Intel’s stock up until Thursday.
The Nvidia news is “a game changer deal for Intel as it now brings them front and center into the AI game,” Wedbush’s Dan Ives told clients in a note Thursday.
Wedbush said it expects the move, which could lend Intel some of Nvidia’s AI-driven tailwinds, to help stem further losses of Intel’s existing market share in server and PC products and boost the company’s longer-term prospects.
“The chip landscape remains [Nvidia’s] world with everybody else paying rent,” Ives said. Bernstein analysts led by Stacy Rasgon called the blessing from Nvidia “priceless.”
Some analysts said Intel may need further support. Moor Insights & Strategy CEO Patrick Moorhead called it a “step in the right direction” in an interview with CNBC Thursday, though he suggested Intel likely requires another $5 billion to $10 billion to build out its chip manufacturing capabilities.
However, Moorhead said, there’s now a “pretty long line of people” the chipmaker could turn to in exchange for some concessions. “The question becomes control, ownership, and voting rights,” he said.
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