Why Intel Stock Bounced Back Today
Key Points
The Information reports that Google will place a big order with Intel for semiconductor chips.
Nvidia and Tesla may also soon partner with Intel.
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Intel (NASDAQ: INTC) stock got caught up in an epic sell-off last week as semiconductor chip stocks lost $1 trillion in market capitalization. Intel stock, in particular, lost 13.5% by the close of the week.
Shares of what was once the world's biggest manufacturer of semiconductor chips bounced back with a vengeance this morning, however, and are up 11.5% as of 10:40 a.m. You can thank Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) for that.
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Image source: Intel.
Google wants Intel inside
As The Information reports this morning, Alphabet may have just placed an order for Intel to manufacture 3 million tensor processing unit (TPU) artificial intelligence chips in 2028. The rumor is not yet confirmed -- and we don't actually know how much a 3-million TPU order would be worth to Intel even if it is true -- but that's not stopping investors from buying into Intel stock today.
This isn't surprising. After all, according to StreetInsider.com, Alphabet's order may be only the start. Rumors are also floating that Intel may act as a contract manufacturer for Nvidia (NASDAQ: NVDA), building a new processor combining four Nvidia GPUs in a single unit.
And as if that weren't enough, SI also reports that Tesla (NASDAQ: TSLA) may want to partner with, or license Intel's next-generation 14A manufacturing process to make Tesla chips at Terafab.
What's next for Intel?
Long story short, opportunities abound for Intel, and if even just one of these rumors proves true, it could help the company turnaround.
Does this make Intel stock a buy after its stock has already run up 464% this past year? Does it make Intel stock a buy even though it's unprofitable, and trading for more than 120 times next year's earnings?
I admit I have my doubts, but today's still a good day for Intel.
Should you buy stock in Intel right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Intel, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
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