Please ensure Javascript is enabled for purposes of website accessibility

Why Intel's Shares Surged Today

By Anders Bylund - Apr 9, 2013 at 4:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This 3.6% share-price bounce sounds like a huge sigh of relief.

Shares of Intel (INTC 2.46%) jumped 3.6% overnight on Tuesday. It was one of the 10 strongest performers among the S&P 500 (^GSPC 2.47%) on a generally strong market day, and a welcome reversal that erased a week's worth of slumping share prices.

I think you can point to two catalysts for this sudden move, but one is far stronger than the other.

Last night, Intel presented the second version of its Thunderbolt computer connectivity tech. These cables and ports will shuttle data between systems and accessories at 20 gigabits per second, which is twice as fast as the first version and six times faster than the popular USB 3.0 specification. Thunderbolt was developed in cooperation with Apple (AAPL 4.08%) and is a standard feature of modern Mac systems. It's harder to find a standard PC computer sporting Thunderbolt interfaces today, though this drastic speed bump might encourage wider adoption.

So that's the smaller news. Intel shares started the day quietly, as if the Thunderbolt presentation had never happened.

The big driver came later this morning, when Hewlett-Packard (HPQ 5.38%) finally introduced its Moonshot server systems, which promise to put hyper-efficient mobile processors at work in the data center. That product line has been seen as a major threat to Intel, since the rumor mill and early prototypes pointed to ARM Holding (ARMH) providing the basic architecture.

Adding another server to HP's new Moonshot system. Source: HP press center.

But Moonshot turned out to be an egalitarian product. Yes, ARM chips are coming later this year, but the first systems will run on a new version of Intel's Atom-class mobile chips.

This nearly 4% jump looks like a huge sigh of relief. Mobile processors are indeed about to invade the data center and attack Intel's strongest revenue base, but Intel is spearheading the attack in person. That's worth a $4 billion surge in Intel's market value today.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Intel Corporation Stock Quote
Intel Corporation
INTC
$44.55 (2.46%) $1.07
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,158.24 (2.47%) $100.40
Apple Inc. Stock Quote
Apple Inc.
AAPL
$149.64 (4.08%) $5.86
HP Inc. Stock Quote
HP Inc.
HPQ
$38.75 (5.38%) $1.98
ARM Holdings plc Stock Quote
ARM Holdings plc
ARMH

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.