The semiconductor giant Nvidia has acquired about 4% of Intel (INTC) through a $5 Billion deal that has stirred discussions about what this co-operation would bring forth in the tech field and in the stock market. NVIDIA bought 214.8 million shares in Intel at a fixed price of $23.28 per share- a rate 36.9% discounted from Intel’s current price of $36.90.
The move comes as Intel moves to high-volume production of next-gen 18A chips in the Arizona Fab 52 facility. Intel will also act as a foundry that manufactures CPUs that integrate with Nvidia RTX GPU chiplets, paving the way for next-gen hardware that can meet the computational demands of the soaring AI wave.
NVIDIA to Kill Two Birds With One Stone: Eases TSMC Dependence and U.S Pressure
NVIDIA’s move is not just a “getting in bed with the enemy” cooperation for advancing its manufacturing. It’s a rich strategy that eases their dependence on TSMC (Taiwan Semiconductor Manufacturing Company) in the long-term and satisfies the US government’s mounting pressure for manufacturing on American soil.
TSMC is the world’s topmost foundry that manufactures chips for big players like Apple, Nvidia, Qualcomm, AMD, and MediaTek. In fact, Nvidia is TSMC’s second biggest client as they outsource fabrication of high-end GPUs and Blackwell family (B100, B200, GB200) chips to TSMC. Although the partnership with Intel doesn’t change this immediately, it’s a step towards diversifying its supply chain and a step away from complete dependence on TSMC.
The U.S government has been increasingly conservative in its industrial policy as it sees overdependence on Asian manufacturing hubs as a strategic vulnerability. The U.S government also pressures companies to manufacture in the American soil to keep the jobs in the U.S as well as to keep industries within America’s ambit of control. Intel is manufacturing its A18 chips in Chandler, Arizona, US. Hence, the $5B partnership with them will help Nvidia to appear to be more aligned with U.S policy goals.
What Intel Stands to Gain?
Apart from a $5 billion cash injection, the deal will positively impact Intel’s reputation and enable its systems-foundry ambitions. A validation from Nvidia for its 18A chips will set a narrative that Intel is critical in the upcoming AI hardware upgrades. This will help Intel to secure more clients and become a full blown foundry.
The US government acquired a 9.9% stake in Intel for $8.9 Billion in August 2025, driven by the US CHIPS and Science Act and Secure Enclave Program, both of which promote domestic manufacturing of high-end technology. The funding from the government and inflows from technological leaders can push Intel’s scope, along with its share prices.
How will the $5 Billion Play out in the Stock Market?
The AI boom has led to an explosion of valuation of the semiconductor industry. Nvidia achieved the milestone of $4 trillion market capitalization in 2025, with its share price growing 35.12% and is currently priced at $186.50. On the other hand, Intel’s stock grew 84.59% with its current price lingering around $36-$37.
Top analysts, including Ruben Roy and William Stein, reiterate a strong buy rating on Nvidia stock with an average target price of $252.49 and a 35.38% upside. Yet, most analysts maintain a hold rating on Intel as they see an average 13.33% downturn. Tigress Financial’s top analyst Ivan Feinseth disagrees with the consensus rating as he maintains a strong buy signal for Intel, as he sees a 40.92% upside for Intel.
