Shares of Intel (NASDAQ:INTC) rallied from the start on Monday morning, gaining as much as 4.3%. As of 1:32 p.m. ET, the stock was still up 4.2%.
The catalyst that drove the semiconductor giant higher was comments from Nvidia CFO Colette Kress.
It was a record year for Nvidia as the increasing adoption of artificial intelligence (AI) led to pressure on the graphics processing units (GPUs) used to power it. As a result, demand far exceeds supply.
According to some reports, the shortage of these graphics cards could continue for the next 12 to 18 months, according to a report from technology news site Tom’s Hardware.
While the vast majority of these processors are manufactured by Taiwan semiconductor manufacturing (also known as TSM), Nvidia is open to working with another manufacturer to reduce the backlog – namely Intel.
During the last week UBS At the Global Technology Conference, Kress was asked whether Nvidia would consider using Intel as a foundry partner to produce its cutting-edge AI chips. The CFO said the company would be happy to do that. After commenting on existing foundry partnerships with TSM and SamsungKress said: “Would we love a third foundry? Clear. We would love a third… (there is) nothing stopping us from potentially adding another foundry.”
We’ve heard this story before
This is not the first time that Nvidia has expressed its willingness to share some of its chip manufacturing with Intel. Last year, Nvidia CEO Jensen Huang said the company had plans to diversify production of its AI processors. He continued that Nvidia has reviewed Intel’s test chip and the “results look good.”
Intel is currently a mixed picture, although its foundry business is at a high point. There are reasons to buy and there are reasons to sell, and investors should do more homework to decide if the stock is right for their situation.
More from The Motley Fool
Danny Vena holds positions at Nvidia. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
Why comments from Nvidia’s CFO sent Intel stock into rally mode this morning was originally published by The Motley Fool