Intel's stock extends gains amid AMD partnership speculation
Intel's shares continued to climb on Monday, fueled by investor optimism that rival chipmaker AMD might transition into a strategic partner. The potential collaboration could help Intel address its manufacturing challenges. This comes as both companies navigate a competitive semiconductor landscape.
Intel Corp.'s stock extended its recent rally on Monday, rising more than 2% in midday trading to around $22.50 per share. The gains follow a weekend report suggesting that Advanced Micro Devices Inc. (AMD) could shift from a direct competitor to a key supplier for Intel, potentially providing custom chips to bolster Intel's foundry ambitions.
The speculation stems from ongoing industry shifts, where Intel has been pushing to become a major player in chip manufacturing amid delays in its own production processes. AMD, known for its strong performance in central processing units (CPUs), has gained market share from Intel in recent years. According to the report, the two companies are in early discussions about AMD fabricating chips using Intel's advanced manufacturing technology, a move that could accelerate Intel's recovery.
"This partnership, if realized, would be a game-changer for Intel's foundry business," said an analyst from a major investment firm, as quoted in the MarketWatch article. Intel has invested billions in its foundry operations, aiming to compete with Taiwan Semiconductor Manufacturing Co. However, setbacks like postponed launches of new nodes have pressured the company's stock, which has fallen over 50% in the past year.
AMD's stock also saw modest gains, up about 1%, reflecting broader market interest in the potential alliance. The report highlights that such a deal could leverage AMD's design expertise with Intel's fabrication capabilities, addressing supply chain vulnerabilities exposed during the global chip shortage.
While no official confirmation has been made, the news has reignited investor confidence in Intel's turnaround strategy under CEO Pat Gelsinger. The company reported a net loss of $1.7 billion in its latest quarter, but executives have emphasized partnerships as crucial to future growth. Market watchers note that regulatory scrutiny could arise given the companies' overlapping markets, though antitrust concerns appear minimal at this stage.
This development underscores the evolving dynamics in the semiconductor industry, where collaboration is increasingly seen as a path to innovation and efficiency amid U.S.-China trade tensions and rising demand for AI and data center technologies.