Shares of Intel soared sharply Friday after a report claimed the chipmaker had reached a preliminary agreement with Apple to manufacture chips for some of the company’s devices.
Intel’s stock jumps 15%
Intel stock jumped roughly 15% following the Wall Street Journal report, while Apple shares also moved higher during afternoon trading. The rally came as investors continued piling into AI and semiconductor plays amid growing confidence in the US economy and corporate earnings strength.
Apple partnership could reshape Intel’s manufacturing business
According to a report from The Wall Street Journal, Intel and Apple spent more than a year in negotiations before recently finalizing a preliminary agreement. The report cited people familiar with the matter and said the US government played a significant role in helping bring the two companies together.
The exact Apple products involved in the proposed manufacturing arrangement remain unclear. Intel declined to comment on the report, while Apple and the White House did not immediately respond to requests for comment.
If completed, the deal would mark one of the most significant wins in Intel’s effort to revive its manufacturing division after years of losing ground to TSMC, the dominant global contract chipmaker.
Why the deal matters for Apple
For Apple, a partnership with Intel could help reduce its dependence on TSMC, whose production capacity has been stretched by massive demand tied to artificial intelligence chips.
During Apple’s most recent earnings report, CEO Tim Cook acknowledged that supply constraints had impacted iPhone sales. A second manufacturing partner could help Apple secure additional chip capacity at a time when competition for advanced semiconductor production remains intense.
TSMC currently manufactures advanced processors for major AI companies including Nvidia and AMD, contributing to ongoing shortages across the sector.
Broader market rally also lifted chip stocks
The Intel surge arrived during a broader rally on Wall Street driven by stronger-than-expected labor market data and renewed enthusiasm around AI-related stocks.
The semiconductor sector has rallied sharply in recent sessions, with investors betting that resilient economic growth will continue supporting corporate earnings despite ongoing geopolitical tensions and energy market uncertainty.
“The economy is so much better than what the doom crew has been saying,” Chris Zaccarelli at Northlight Asset Management said, per Bloomberg. “There are a lot of headwinds – higher oil prices, sticky inflation and higher-for-longer interest rates – and yet the labor market is adding jobs.”
“Bears continue to point to the narrowness of the rally, particularly in areas like semiconductors, but momentum, both in price action and earnings revisions — has remained the dominant force driving markets higher,” Mark Hackett at Nationwide told the publication.
Analysts also noted that strong economic data may keep the Federal Reserve cautious about cutting interest rates anytime soon.
“Strong data and inflation have likely put paid to any easing in the foreseeable future, though this could change depending on how energy prices and the situation in the Middle East develop,” said Lindsay Rosner at Goldman Sachs Asset Management.
