Intel Corporation’s stock surged more than 16%, driving the Philadelphia Semiconductor Index, a key benchmark for the chip industry, up by over 1%.
On Tuesday, the semiconductor index rose 1.68% to 5,247.85 points on the New York Stock Exchange.
The rally was widespread across the semiconductor sector, with NVIDIA and Intel Corporation leading the charge.
Intel’s stock price skyrocketed 16.06%, closing at $27.39. Over the past five trading sessions, it has gained an impressive 38.54%.
Persistent acquisition rumors have driven Intel’s recent rally.
The Wall Street Journal reported that Broadcom and TSMC are considering potential acquisitions of Intel, sending the latter’s stock soaring.
Sources indicate that Broadcom is interested in acquiring a stake in Intel’s chip design and marketing division, while TSMC is reportedly looking to invest in Intel’s foundry business.
This potential split-up has been viewed favorably by Wall Street analysts.
Srini Pajjuri, an analyst at Raymond James, suggested that separating Intel’s general semiconductor and foundry divisions could unlock significant value.
Pajjuri proposed that the resulting synergies could be substantial if Broadcom acquires the general semiconductor arm and TSMC takes a stake in the foundry business.
In this scenario, he predicted that Intel’s market capitalization could surpass $200 billion. As of today, it stands at $118.5 billion.
While Intel’s stock climbed, potential acquirers Broadcom and TSMC saw their shares dip 1.94% and 0.57%, respectively, following a common trend where acquiring companies often experience stock price declines.
NVIDIA ended the day positively, rising 0.40% to $139.40.
Investment publication Inside Money ranked NVIDIA third among the top 10 AI stocks, citing strong demand for the company’s specialized AI chips.
Amazon took the top spot, followed by Microsoft, NVIDIA, Apple, and Tesla, which round.
NVIDIA’s gains also boosted its rival AMD, which saw a 1.05% increase.
Micron Technology, the largest U.S. DRAM manufacturer, surged 7.31% on strong AI-driven demand, contributing to the broader semiconductor rally. These gains collectively pushed the semiconductor index up by over 1% by the close of trading.