Shares of Intel (INTC +0.00%) rallied out of the gate on Monday morning, adding as much as 4.3%. As of 1:32 p.m. ET, the stock was still up 4.2%.
The catalyst that sent the semiconductor giant higher was comments made by Nvidia chief financial officer Colette Kress.
NASDAQ: INTC
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A collaboration?
It's been a banner year for Nvidia, with the hastening adoption of artificial intelligence (AI) causing a run on the graphics processing units (GPUs) used for it. As a result, demand has far outstripped supply.
By some accounts, the shortage of these graphics cards could last for the coming 12 to 18 months, according to a report by technology news site Tom's Hardware.
While the vast majority of these processors are manufactured by Taiwan Semiconductor Manufacturing (aka TSM), Nvidia is open to working with another foundry to ease the backlog -- namely Intel.
During last week's UBS Global Technology Conference, Kress was asked if Nvidia would consider using Intel as a foundry partner to produce its state-of-the-art AI chips. The finance chief said the company would "love" to. After commenting on existing foundry partnerships with TSM and Samsung, Kress said: "Would we love a third one? Sure. We would love a third one ... [there's] nothing that stops us from potentially adding another foundry."
We've heard this story before
This isn't the first time Nvidia has alluded to its willingness to share some of its chip manufacturing with Intel. Last year, Nvidia CEO Jensen Huang said the company had plans to diversify the production of its AI processors. He went on to say that Nvidia had reviewed Intel's test chip, and the "results look good."
Intel is a mixed bag at this point, though its foundry business is something of a high point. There are reasons to buy and to sell, and investors should do more homework to decide if the stock is right for their situation.
