Nvidia’s stock notched a new record close — its first in nearly half a year — propelled by a fresh wave of enthusiasm for semiconductor stocks.
The latest big catalyst is Intel, which on Thursday afternoon reportedstronger-than-expected first-quarter earnings— partly on its own merit, and partly due to broader chip-sector trends. The company was once seen as an also-ran in the artificial-intelligence-chip race, but it’s been able to improve its fortunes in recent months by enhancing its technology and seizing upon a boom in server central processing units.
That’s become good news for Nvidia, which is working with Intel to develop multiple generations of data-center and personal-computer products for consumer, enterprise and hyperscale markets. Nvidia last fall also said it would invest $5 billion in Intel at a price of $23.28 per share.
Intel shares closed up 23.6% on Friday at $82.57 a share, about 250% above Nvidia’s purchase price.
Nvidia’s stock gained 4.3% to eclipse $208 a share on Friday, clinching its first new record close since Oct. 29, according to Dow Jones Market Data.
The gains for Nvidia also come amid a broader wave of optimism for chip stocks.
Advanced Micro Devices’ stock climbed 13.9% Friday,attaining a market capitalization above $500 billionfor the first time ever. That’s in part due to Intel’s validation of the broader CPU narrative.
“We figured CPUs were the next big bottleneck, but Intel’s results indicate that is already translating to very significant upside,” D.A. Davidson managing director Gil Luria said in a note to clients. Luria also upgraded AMD’s stock to buy from neutral, writing of “meaningful upside” for AMD.
Texas Instruments also reported anearnings beatthis week, while STMicroelectronics had more mixed results but still left investors optimistic. Broadcom this week alsocrossedthe $2 trillion market-cap threshold, becoming the sixth company in U.S. history to do so.
The PHLX Semiconductor Index rose 4.3% on Friday, extending its longest winning streak on record, based on data going as far back as May 1994, according to Dow Jones Market Data.
“This has been an incredible week for semis,” Seaport Research analyst Jay Goldberg told MarketWatch.
It’s “very clear” from recent earnings that there’s a compute shortage, Goldberg said. “People are finding new ways to use AI, and as a result, there’s just not enough computers out there, there’s not enough chips. Everybody’s scrambling for more compute.”
But perhaps nothing can last forever.
“While we have been wrong on calling an end to the semi run, we think the window for a meaningful downside reversal is close,” Jonathan Krinsky, chief market technician at BTIG, wrote in a note.
Comments