Shares in the semiconductor sector gained momentum in premarket trading Thursday after Nvidia (NASDAQ:NVDA) announced a $5 billion investment in Intel (NASDAQ:INTC) and revealed a collaboration to develop next-generation chips for PCs and data centers.
Intel led the surge, climbing more than 31% to trade above $32 per share, a level not seen since July 2024. The agreement includes Nvidia purchasing Intel shares at $23.28 each. Under the partnership, Intel will produce Nvidia-custom x86 CPUs for AI infrastructure platforms and develop x86 system-on-chips that integrate Nvidia RTX GPU chiplets for high-performance computing.
The alliance will merge Nvidia and Intel architectures using Nvidia’s NVLink technology, combining Intel’s CPU expertise with Nvidia’s AI and GPU strengths.
Other semiconductor stocks also saw gains amid sector-wide optimism. ASML (NASDAQ:ASML) rose 7.4%, Lam Research (NASDAQ:LRCX) increased 4.6%, Applied Materials (NASDAQ:AMAT) added 6%, KLA Corp (NASDAQ:KLAC) climbed 4.8%, while Micron Technology (NASDAQ:MU) and Marvell Technology (NASDAQ:MRVL) both advanced over 2%. Broadcom (NASDAQ:AVGO) and Qualcomm (NASDAQ:QCOM) posted moderate increases. The VanEck Semiconductor ETF was up 3.2% in premarket trading.
However, not all chipmakers benefited equally. Advanced Micro Devices (NASDAQ:AMD) fell 4.5%, Taiwan Semiconductor Manufacturing (NYSE:TSM) dropped 2.7%, and ARM Holdings (NASDAQ:ARM) declined 4.5%.
The Nvidia-Intel collaboration, following Intel’s $8.9 billion government-supported investment in August, is widely viewed as a major catalyst for Intel. The partnership is expected to accelerate AI chip development and bolster both companies’ positions in high-performance computing, lifting investor sentiment across the semiconductor industry.
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