Intel (NASDAQ:INTC) stock skyrocketed 30% on Thursday after Nvidia (NASDAQ:NVDA) revealed it would invest $5 billion in the chipmaker as part of a strategic partnership to co-develop both data center and PC chips. The announcement comes just weeks after Intel secured backing from the U.S. government.
According to Nvidia’s statement, the investment will be made at $23.28 per share. Following the news, Intel’s stock surged in premarket trading to about $32 per share.
“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,” said Nvidia CEO Jensen Huang in a release.
Nvidia now joins SoftBank and the U.S. government in lending support to Intel’s turnaround efforts. Earlier this year, Intel shares sank to their lowest level in over a decade but rebounded after receiving a boost from Washington. In August, the Trump administration agreed to purchase a 10% stake in the company. Around the same time, SoftBank committed $2 billion to Intel.
The U.S. government’s investment totaled $8.9 billion for 433.3 million shares. With Intel trading just above $32, that stake has grown in value to $13.9 billion.
“What’s unclear is whether this represents token cooperation intended for political purposes, or if it’s the start of a wider collaboration that would more significantly benefit INTC,” wrote Wolfe Research’s Chris Caso in a note following Thursday’s news.
Caso added that one of the central questions is whether Nvidia will eventually rely on Intel’s fabrication facilities.
For now, the agreement — which still needs regulatory approval — does not cover Nvidia producing its own chips at Intel’s foundries. Both Huang and Intel CEO Lip-Bu Tan are expected to address details of the deal in a press conference scheduled for 1 p.m. ET.
As outlined in the release, Intel will manufacture x86 CPUs for Nvidia’s AI infrastructure systems, while also producing x86 system-on-chips that integrate Nvidia’s RTX graphics processors for personal computers.
Meanwhile, Nvidia’s stock advanced 3% in premarket trading as the company continues to navigate U.S.-China trade negotiations over chip export approvals.
Heading into Thursday’s session, Intel shares were already up 11% since the start of July.
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