Chipmakers rally as Nvidia invests $5B in Intel, sector sees broad gains

Investing.com -- Shares of semiconductor companies gained ground in premarket trading on Thursday following news that Nvidia is investing $5 billion in Intel and that the two companies will collaborate on developing chips for PCs and data centers.

Intel is leading the rally, jumping over 31% to trade above $32, a level not seen since July 2024, after Nvidia announced it would purchase Intel shares at $23.28 each.

The partnership will see Intel build Nvidia-custom x86 CPUs for AI infrastructure platforms, while developing x86 system-on-chips incorporating Nvidia RTX GPU chiplets for high-performance PCs.

The collaboration will connect Nvidia and Intel architectures using Nvidia NVLink technology, combining Intel’s CPU expertise with Nvidia’s AI and GPU capabilities.

Other semiconductor stocks followed suit, reflecting optimism across the sector. US-listed shares of ASML gained 7.4%, Lam Research rose 4.6%, Applied Materials added 6%, KLA Corp climbed 4.8%, Micron Technology and Marvell Technology both increased over 2%, and Broadcom and Qualcomm advanced modestly.

The VanEck Semiconductor ETF rose 3.2% in premarket trading.

Not all chipmakers benefited equally. Advanced Micro Devices has declined 4.5%, Taiwan Semiconductor Manufacturing Co. has dropped 2.7%, and ARM Holdings has declined 4.5%.

The Nvidia-Intel deal, which follows Intel’s $8.9 billion government-backed investment in August, is seen as a major catalyst for Intel.

The collaboration could accelerate AI chip development and strengthen both companies’ positions in high-performance computing markets, helping lift investor sentiment across chipmakers.

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