Why Intel Stock Jumped 7.6% Today
Key Points
Intel shares rose after Reuters reported that SK Hynix is exploring an Ohio lease or a joint venture, though no deal has been finalized.
A deal could give Intel Foundry a future customer and potentially ease financial pressure, but regulatory review remains a risk.
Intel's Q2 revenue rose 25% to $16.1 billion, while Data Center and AI revenue climbed 59% to $6.3 billion.
Intel (NASDAQ: INTC) stock jumped roughly 7.6% on Thursday after news broke yesterday of a possible deal that would see SK Hynix's memory chips fabricated in Intel's Ohio factories.
The S&P 500 and the Nasdaq Composite rose 1.1% and 1.7%, respectively, on Thursday.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
SK Hynix could give Intel's Ohio fabs a customer
Reuters reported on Sept. 16 that SK Hynix is discussing either leasing part of Intel's planned Ohio facility or forming a venture with Intel and others. The talks are exploratory, and no formal deal has been made, but the possibility of a deal has been enough to boost Intel for two sessions in a row.
If a deal materializes, it could be a significant one for the U.S. chipmaker's Foundry business, which has struggled. The company considered selling it off before CEO Lip-Bu Tan made it a core part of his turnaround efforts after years of underperformance.
Image source: Getty Images.
Intel stock was also caught up in a marketwide rally as bond yields and oil prices both fell from recent highs.
Intel still has a large financial hole to climb out of
So far, efforts have paid off on the top-line; Intel's Q2 revenue rose 25% to $16.1 billion, while Data Center and AI revenue climbed 59% to $6.3 billion.
Investors should also be cautious about a rumored deal as it could face additional regulatory hurdles from the South Korean or U.S. governments.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel. The Motley Fool has a disclosure policy.