Intel stock surges over 30% after Nvidia takes $5 billion stake

Intel stock rises above $32 for the first time in 15 months.
Nvidia has agreed to take a $5 billion stake in Intel.
Intel will use Nvidia's NVLink protocol for its data center chips.
Further partnership will allow both companies to offer high-end chips to PC market.

Clay Webster FXStreet

Intel (INTC) stock is trading at its highest level since July 2024 on Thursday after news broke that the Artificial Intelligence leader Nvidia (NVDA) has taken a shine to the legacy chipmaker.

Nvidia will take a $5 billion stake in Intel, as well as launching a partnership with Intel to co-develop PC and data center chips.

The wider equity is also seeing gains a day after the Federal Reserve (Fed) cut interest rates by 25 basis points and used its dot plot to signal two additional cuts before the year is out.

Intel stock news

The agreement serves as a sign that Intel is hitching its wagon to Nvidia's coattails, a proposition that argues Intel is far from dead after inking a much-mocked deal with the Trump administration to give the federal government a $10 billion stake in order to keep federal funds already allotted by the previous Biden administration.

Intel has agreed to use Nvidia's NVLink, a protocol that allows faster data transfers between CPUs and GPUs. This will mean that Intel's x86 architecture for data center CPUs will now adhere to Nvidia's technology stack.

Intel will then offer Nvidia-based customized x86 CPUs for data centers and produce x86 system-on-chips that integrate into Nvidia's RTX GPUs. These RTX system-on-chips will be aimed at the PC market, which Intel once had a stranglehold on before rival Advanced Micro Devices (AMD) began taking major market share over the past decade. Nvidia stock rose 2.5% at Thursday's open, while AMD stock sank more than 5% on the news.

If regulatory hurdles are met, Nvidia's $5 billion investment in Intel's common stock will come at a price of $23.28 per share. This means that Nvidia will own nearly 215 million shares of Intel or about 5% of the company.

Intel stock forecast

Intel stock closed at $24.90 on Wednesday but has traded as high as $33.43 in the premarket on Thursday. This rally closes the gap created following the August 1, 2024, low of $28.89. My, my, how markets love to fill gaps.

Some traders will surely be tempted to take profits after being stuck in the low $20s for so long. Intel stock has been using the $19.00 level as support over the past year, and certainly some investors are now sitting on 50% or more gains if they scooped up shares at those low levels.

The July 17, 2024, range high at $37.16 is the primary bull target, while the aforementioned $28.89 level is the most prominent nearby support.

INTC daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Week ahead – RBNZ and BoC decide on rates ahead of all-important US NFP

Dollar rebounds ahead of ISM PMI and NFP data. RBNZ is expected to raise rates; focus to fall on forward guidance. BoC is set to remain on hold; will it raise rates in 2027?

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.