Intel Stock Jumps On Report Of Nvidia, Broadcom Weighing Chip Maker As Potential Supplier – Retail Lacks Confidence

synopsis

Intel (INTC) shares climbed nearly 4% in morning trading on Friday after a Reuters report said that Nvidia (NVDA) and Broadcom (AVGO) are running manufacturing tests using Intel’s 18A process. 

The report also stated that Advanced Micro Devices (AMD) is evaluating Intel’s technology but did not confirm whether AMD has submitted test chips for production.

An Intel spokesperson declined to comment on specific customers but said the company continues to see "strong interest and engagement on Intel 18A across our ecosystem."

The testing phase, which can take months, is meant to evaluate Intel’s chipmaking capabilities before committing to large-scale production. 

According to the report, Nvidia and Broadcom are not testing complete chip designs but are instead assessing how Intel’s 18A process handles specific components – a standard step before deciding on full-scale manufacturing.

An ongoing Stocktwits poll showed that while most retail investors viewed the news as a "huge win" for Intel, 35% remained cautious, pointing out that testing does not guarantee production deals. 

Some traders believe Nvidia will ultimately stick with Taiwan Semiconductor Manufacturing Co. (TSMC), its longtime manufacturing partner.

Stocktwits poll asking retail traders whether Nvidia and Broadcom testing Intel's chips is a turnaround moment for the stock, or just hype. | Source: Stocktwits

Intel’s 18A process, which has been in development for years, is designed to produce advanced artificial intelligence processors and other complex chips. 

The technology competes with TSMC, the dominant player in the chip fabrication industry.

Intel retail sentiment and message volume on March 3 as of 11:15 a.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment around Intel’s stock improved marginally but remained in ‘bearish’ territory despite the news. 

One investor pointed out that test chips are routine practice and that Intel needs to show “real change.”

https://stocktwits.com/Tat2doc/message/606490638

Others speculated that Intel could benefit from U.S. government intervention, suggesting that geopolitical considerations might push Nvidia toward domestic manufacturing.

https://stocktwits.com/ss1983/message/606469575

The news comes after the company announced on Friday that its promised $28 billion chip fabrication plants in Ohio are facing further delays. The first factory in New Albany is now expected to be completed only by 2030.

Intel's contract manufacturing, or foundry business, was central to the turnaround strategy of former CEO Pat Gelsinger, who was ousted in December without a succession plan in place. 

Intel’s shares fallen 44% over the past year. The stock has been trying to break above its 200-day simple moving average (SMA), a key technical indicator, but has not been able to do so convincingly.

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