Intel shares jump 22% after $5 billion Nvidia deal, records biggest gain since 1987
Nvidia has announced it will invest $5 billion in Intel as part of a strategic partnership to co-develop data center and PC chips with the struggling chipmaker, which secured U.S. government backing last month.
According to a press release, Nvidia will purchase Intel shares at $23.28 each. Intel’s stock surged by 22.8%, closing at $30.57 following the announcement, marking its best day since October 1987. Nvidia’s shares also saw a 3.54% increase on Thursday.
Nvidia CEO Jensen Huang hailed the partnership as a groundbreaking fusion of AI and accelerated computing with Intel’s CPUs and the vast x86 ecosystem. “This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem – a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing,” he said.
The deal strengthens Nvidia’s role alongside Softbank and the U.S. government in supporting Intel’s recovery. Earlier this year, Intel’s stock hit a 10-year low, but has rebounded following investments from both the Trump administration and SoftBank. In August, the U.S. government committed to a 10% stake in Intel, while SoftBank invested $2 billion.
The government’s $8.9 billion investment for 433.3 million Intel shares is now valued at $13.2 billion, thanks to the rise in Intel’s stock price. White House deputy press secretary Kush Desai described the Nvidia-Intel deal as a “major milestone for American high-tech manufacturing.”
Chris Caso, an analyst at Wolfe Research, expressed uncertainty about whether this collaboration is merely symbolic or if it will evolve into a more significant partnership that could benefit Intel. He noted that one key question remains: whether Nvidia will manufacture chips at Intel’s fabs.
While the deal is still pending regulatory approval, it appears that Nvidia and Intel’s collaboration won’t involve Nvidia producing its own chips at Intel’s foundries. Instead, Intel will manufacture x86 processors for Nvidia’s AI platforms and x86 system-on-chips for Nvidia’s RTX GPUs, which will power PCs.
Meanwhile, Nvidia is still navigating U.S.-China trade talks to secure approval to sell less-advanced chips in China.
