Why did Intel’s good news drive Nvidia’s stock to surge?

Intel’s latest earnings report shows that both its revenue and profits exceeded market expectations, boosting confidence in the wafer semiconductor sector. Fueled by this, NVIDIA (NASDAQ: NVDA) saw its stock price jump 4.9% by midday on Friday in U.S. Eastern Time, reaching $209.08 per share as of the time of writing. This shows that while NVIDIA and Intel are competitors, investors view Intel’s strong performance as an indicator that artificial intelligence demand remains steady and solid, shattering fears that all the AI hype will turn into a bubble—driving a sharp rise in related stocks.

Intel’s results exceed market expectations

According to the financial data Intel announced after market close on Thursday, its projected earnings per share (Earnings Per Share, EPS) was $0.29, significantly higher than the $0.01 analysts had previously expected. In terms of revenue, Intel delivered $13.6 billion, beating the market expectation of $12.4 billion. Although Intel’s share in the GPU market still cannot match NVIDIA’s, its first-quarter sales rose 7% year over year, and it is expected to maintain about 5% quarter-over-quarter growth in the second quarter. This data reflects that the momentum behind updates to data centers and computing equipment has not stalled. For the broader semiconductor industry, this is a signal that eases growth concerns, supporting the stock performance of related AI industries.

NVIDIA investors focus on growth momentum in the artificial intelligence market

NVIDIA’s stock price has gained a cumulative 650% over the past three years, making it a bellwether company during the AI wave. Its GPU chips have become standard equipment for running large language model workloads. However, concerns have recently emerged in the market about “return on investment,” mainly because downstream customers are pouring massive sums into buying high-priced chips and building data centers, while in the short term the direct profits obtained from AI services are relatively limited. For NVIDIA’s investors, they closely watch for any signs that industry growth is slowing down. Intel’s growth data, to a certain extent, confirms that even in an industry competition structure with asymmetry, market demand for core computing hardware remains positive, reducing fears of an AI bubble.

The artificial intelligence sector continues to expand, and NVIDIA’s future earnings look optimistic

NVIDIA’s price-to-earnings ratio is currently about 41x, reflecting the market’s high expectations. Analysts predict that the company’s profit growth rate over the next five years could reach 40%. Such a high valuation multiple is typically built on extremely stable demand expectations. Intel’s earnings report is interpreted not only as a single company’s performance, but also as a key leading indicator ahead of NVIDIA’s earnings release next month. If Intel can achieve growth in its traditional computing and data center business, it suggests that the market believes capital expenditures (CapEx) for high-performance computing (HPC) have not been reduced. Based on this, investors judge that NVIDIA has a higher likelihood of maintaining strong demand in the upcoming earnings cycle, supporting the resilience of its stock price even at a high P/E ratio.

Although NVIDIA and Intel have a competitive relationship in the AI chip space, at present the two are showing more positive sector-level linkage.

Why did this article’s Intel good-news story drive NVIDIA’s stock to soar? It first appeared on Chain News ABMedia.