Intel stock jumped around 30% on Thursday after Nvidia announced a $5 billion investment, but the surge masks some deeper concerns about Intel’s struggling foundry business. Even with the INTC stock rally, Intel stock price gains may be temporary as the company’s manufacturing division continues bleeding $13 billion annually, which raises questions about the chipmaker’s long-term viability right now.
Intel Stock Price, INTC Surge and Nvidia Intel $13B Foundry Risks
Nvidia Deal Actually Sends INTC Stock Soaring
The Nvidia Intel partnership gives Nvidia a 4% stake in Intel while creating joint AI infrastructure products along with other initiatives. Under the agreement, Intel will build custom CPUs for Nvidia’s AI servers, and Nvidia will integrate AI technology into Intel’s PC semiconductors.
Wedbush analyst Dan Ives had this to say:
“This is a game changer deal for Intel as it now brings them front and center into the AI game.”
Jensen Huang stated:
“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.”
The $13B Foundry Crisis Behind INTC Stock Gains
Despite the INTC stock surge, Intel’s foundry business remains quite problematic at the time of writing. Intel Foundry Services losses were ballooned to $13 billion in 2024 from $7 billion in 2023, which contributed to INTC stock’s 60% decline last year.
CFRA analyst Angelo Zino told Yahoo Finance:
“This is a business that will continue to bleed cash at least through 2027.”
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The Nvidia deal notably excludes Intel’s foundry operations, which actually surprised some analysts. Moor Insights & Strategy analyst Anshel Sag said:
“In fact, I was expecting that Nvidia was going to announce some sort of contract manufacturing deal with Intel, with the US government’s involvement.”
What Does the INTC Stock Rally Means Going Forward
While the Nvidia partnership boosts Intel stock credibility, the fundamental foundry challenges persist right now. The US government’s 10% stake in Intel underscores the strategic importance of domestic chip manufacturing, but Intel stock performance will ultimately depend on resolving the $13B foundry losses that are plaguing the company.
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