Intel (ASML 0.15%) stock popped on Monday, dropped on Tuesday, and is up again on Wednesday-- a solid 4.3% gain for the day through 3:30 p.m., but still leaving the semiconductor stock trading below where it was at the start of the week.
And why?
It may surprise you to learn that the same thing that boosted Intel stock Monday is helping it again today: The SpaceX (SPCX 3.86%) IPO is going to be good news for Intel stock.
Image source: Intel.
SpaceX is flush with cash now
SpaceX made history last week, scoring a gigantic valuation (currently $2.5 trillion) and also raising more than $80 billion in cash. Now, SpaceX must figure out how to deploy this cash to sustain its growth.
According to Canadian private equity shop Lynx Equity, SpaceX will do this by spending heavily on semiconductors.
Most investors think of SpaceX as a space company (after all, it's right there in the name!) And yet, the tech giant that IPO'ed last week is really much more of an AI stock, as SpaceX demonstrated yesterday when it splashed out $60 billion in stock to buy Cursor.
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Key Data Points
What this means for Intel
As Lynx explains, AI companies must spend heavily on AI chips to first train and then deploy their large language models to answer questions. With its emphasis on AI, SpaceX will similarly spend heavily on semiconductors.
Lynx names Intel (INTC +0.83%) and Nvidia (NVDA 0.74%) as the two "key beneficiaries" of all this spending. Nvidia is SpaceX's current main AI chips supplier, and Intel is SpaceX's partner in building the Terafab chip factory that will also service Tesla (TSLA 1.74%).
With chips demand booming at both of Elon Musk's two big businesses, this makes Intel a smart play to profit from the SpaceX IPO phenomenon.
