Why Intel Stock Slumped Today
Key Points
Jensen Huang's exit from Nvidia continued to roil the semiconductor industry.
Nvidia owns around $13 billion worth of Intel stock.
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It was an explosive week for the semiconductor industry, and Intel (NASDAQ:INTC) is surely glad that it's over. On Friday, the company's stock sank for the second day in a row, dipping by almost 3% on growing concerns that changes at Nvidia (NASDAQ:NVDA) would negatively affect its operations.
The Nvidia factor
The scandal swirling around now-former Nvidia CEO Jensen Huang continued to reverberate across the semiconductor space, not to mention the broader tech sector. For Intel, it continues to raise questions about its own future.
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This stands to reason, as Nvidia is both a business partner and a major shareholder, owning roughly $13 billion in Intel stock.
The future of that holding is in some doubt with the replacement of Huang by interim chief Colette Kress. Another area of concern is the collaboration between the two companies on custom x86 central processing units (CPUs).
Waiting to see
If there's anything investors don't like, it's uncertainty, and that's swirling around Nvidia and every company it touches. That's a long list, as it's considered by many to be the hardware maker at the forefront of the artificial intelligence (AI) revolution. Personally, I believe the industry will get over the shock of Huang's scandal and resignation, but I'd hold off on making any investment decisions on Intel until its future with Nvidia becomes clearer.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool has a disclosure policy.
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