TLDR
- Intel stock jumped 9% Thursday on reports Apple may invest following Nvidia’s $5 billion commitment
- Nvidia bought Intel shares at $23.28, a 25% discount to current prices, plus joint product development deal
- Intel shares up 70% this year but remain below 2021 peaks, with analyst targets 25% below current levels
- Trump administration backing and domestic chip manufacturing focus fuel investor interest
- Wall Street analysts cautious on fundamentals despite recent partnership momentum
Intel stock powered higher Thursday, gaining nearly 9% as reports emerged about potential Apple investment talks. This follows last week’s announcement of Nvidia’s $5 billion commitment to the struggling chipmaker.
The rally marks a dramatic turnaround for Intel. Just weeks ago, investor sentiment toward the semiconductor company remained deeply pessimistic.
Nvidia Partnership Details Drive Optimism
Nvidia’s deal includes purchasing $5 billion of Intel stock at $23.28 per share. This represents a 25% discount to current trading levels, giving Nvidia an attractive entry point.
The partnership extends beyond the stock purchase. Both companies will jointly develop data center and PC products over multiple generations.
Intel will manufacture x86 system-on-chips incorporating Nvidia RTX GPU technology. The collaboration uses Nvidia’s NVLink architecture to bridge their different chip designs.
This arrangement effectively makes Intel one of Nvidia’s largest customers. The deal combines Nvidia’s AI leadership with Intel’s PC market position.
Intel shares have climbed roughly 70% this year despite remaining well below 2021 highs. The stock closed around $34 Thursday following the Apple investment speculation.
Political Support Adds Momentum
President Trump’s endorsement has provided additional tailwind for Intel shares. The administration views Intel’s foundry business as critical for national security goals.
Expanding domestic chip manufacturing ranks high on the Trump agenda. Intel’s manufacturing capabilities sit at the center of this strategic initiative.
Bernstein analysts admitted being “terrified to short” Intel recently. They suggested “Trump wants the stock to go up” represents a valid investment thesis currently.
Reports indicate Apple could become Intel’s next major investor. Industry experts suggest such a move might help Apple maintain favorable relations with the Trump administration.
Analyst Caution Persists
Wall Street maintains reserved outlooks despite recent gains. Most analysts rate Intel as “hold” rather than “buy.”
Consensus price targets average $26, roughly 25% below Thursday’s close. This gap suggests analysts expect share price normalization ahead.
Seaport Research upgraded Intel to neutral from sell this week. They anticipate additional investments driving near-term momentum while expressing caution about long-term fundamentals.
Nvidia’s investment doesn’t guarantee foundry business commitments. Potential Apple deals may similarly lack manufacturing service agreements.
Bernstein emphasized Intel needs customers more than capital. Success depends on delivering chips meeting client requirements for performance, scale and cost efficiency.
Government support alone cannot resolve operational challenges. Intel must demonstrate competitive manufacturing capabilities to attract meaningful customer commitments.
The recent partnerships and political backing have created positive momentum. However, fundamental business issues require resolution for sustained success.
