Intel shares surge 10% after Trump announces Apple chip deal
What's the story
Intel's shares soared by 10% on Thursday, following President Donald Trump's announcement of a partnership between the semiconductor giant and Apple. The deal involves designing and manufacturing chips in the United States. "Stupid Presidents took our Economy for granted, and let Taiwan and others steal our Semiconductor Factories," Trump said in a post on Truth Social.
Market performance
Intel's stock surge and market cap
Intel's stock has been on a major upswing, gaining 464% in the past year and hitting a market cap of $608.7 billion. Under the leadership of CEO Lip-Bu Tan, who took over early last year, Intel has revived Wall Street's interest. The company has drawn investments from NVIDIA and the Trump administration. "I decided to help Intel because we need to design and build our Chips right here in America," Trump said on Truth Social.
Business expansion
Terafab project and AI boom's impact on stocks
The Terafab project marks a major external commitment for Intel's capital-intensive foundry business, which had only been making chips for its own products. Despite the Middle East conflict disrupting supply chains and oil prices soaring, the AI boom has kept stocks insulated, especially those linked to tech infrastructure. The Nasdaq's PHLX Semiconductor Sector Index is up 90% this year.
Strategic alliance
Apple's strategy to diversify manufacturing base
Apple's partnership with Intel comes as part of its strategy to diversify its manufacturing base and seek additional chip capacity. The iPhone maker heavily relies on TSMC, whose advanced production lines are in high demand from AI chipmakers like NVIDIA and AMD. According to the Wall Street Journal, Apple and Intel reached a preliminary deal after more than a year of discussions.