Intel's stock extends its gains on hopes AMD could go from rival to partner

By Britney Nguyen

Intel has been the beneficiary of recent financial investments, but a report indicates it's in talks to book AMD as a manufacturing customer

Intel's stock was up 7.1% on Wednesday after a report that it could add AMD as a customer for its foundry.

Intel Corp. and Advanced Micro Devices Inc. are rivals - and perhaps soon-to-be partners.

The chip companies are in early-stage discussions over AMD (AMD) potentially becoming a customer for Intel's (INTC) foundry business, Semafor reported on Wednesday, citing unnamed people familiar with the matter. How much manufacturing Intel would do for AMD through a hypothetical partnership is unclear, and there's no guarantee the companies will move forward with a deal.

AMD would be the latest industry rival to link up with Intel, which unlike many of its competitors still manufactures chips, though Intel has warned that it could have to stop if it cannot find a significant external customer for its next-generation 14A processing node.

Intel's stock rose after the report to book a 7.1% gain on Wednesday.

See more: Intel is one of the hottest chip stocks this year. Here's where things stand now.

Whereas investors and analysts once questioned Intel's future, now Wall Street seems to be feeling a bit more upbeat after a series of recently announced partnerships. Intel's stock is up almost 80% on the year.

That said, Bernstein analyst Stacy Rasgon was somewhat skeptical that Intel and AMD would choose to work together.

"AMD and Intel appear to be much starker competitors than Nvidia and Intel in their current core markets, and we find it unlikely that either would really want to rely on the other, at least for now, and we would think that a push for more U.S.-based manufacturing of AMD's parts would be much more easily satisfied through TSMC Arizona," he said in a note to clients.

Last month, Nvidia Corp. (NVDA) announced a partnership to design and manufacture chips with Intel, helping Intel's stock book a 23% gain, its largest in a single day since October 1987, according to Dow Jones Market Data. Nvidia also said that it would make a $5 billion investment into Intel's common stock. Semafor reported that it was uncertain whether AMD would look to invest as well as partner on manufacturing.

The collaboration with Nvidia followed Intel's agreement in August to sell a 10% stake in the company to the U.S. government.

Intel declined to comment Wednesday, and AMD did not immediately respond to a request for comment.

Intel does not have the ability to manufacture AMD's most advanced chips, Semafor reported - but it desperately needs a customer for its foundry. Analysts have noted that Intel's partnership with Nvidia is only product-focused for now.

Meanwhile, Intel has reportedly asked Apple Inc. (AAPL) for an investment, and the two companies have held early-stage talks about working together, according to Bloomberg News.

D.A. Davidson's Gil Luria previously told MarketWatch that after receiving support from the U.S. government and Nvidia, adding Apple as a customer could help Intel "establish its future as the key provider of semi fabrication in the U.S."

"Before the U.S. got involved, Intel didn't have any anchor customers for its 14A technology, which put the future of the company in doubt," Luria said in emailed comments.

Read: Will Apple deliver Intel its next lifeline? Here's why analysts think a deal would make sense.

With Nvidia and possibly Apple in tow, Intel "would have the two biggest consumers of semi fabrication lined up to support its U.S. production," Luria said.

Like Apple, AMD works primarily with Taiwan Semiconductor Manufacturing Co. Ltd. (TW:2330) to manufacture its most advanced chips.

The reported discussions with Intel come at a time when the Trump administration is pushing to bring more chip manufacturing stateside. Earlier this week, Intel's stock jumped 6% after the Wall Street Journal reported that the White House is looking to make U.S. companies manufacture the same amount of chips that customers are importing from abroad under the threat of a tariff.

-Britney Nguyen

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10-01-25 1737ET