Intel Stock Rises After $5 Billion Nvidia Stake Becomes Official

This article first appeared on GuruFocus.

Intel (NASDAQ:INTC) shares rose about 2% on Tuesday morning, extending gains from the prior session, after the chipmaker completed a $5 billion private share sale to Nvidia (NASDAQ:NVDA), making the investment official.

Intel said it closed the equity placement on Dec. 26 following regulatory clearance. The transaction makes Nvidia a roughly 4% shareholder in Intel.

Under the terms, Nvidia purchased about 214.8 million Intel shares at $23.28 each. The deal provides Intel with a sizable cash infusion and marks a rare strategic link between two long-standing rivals in the semiconductor industry.

The purchase price represented a steep discount to Intel’s prior market price, reflecting Nvidia’s strong negotiating position amid its dominance in artificial intelligence chips.

Intel said the investment does not give Nvidia any special governance or information rights beyond those of a standard shareholder.

The company received U.S. regulatory clearance earlier this month, including early termination of the Hart-Scott-Rodino review by the Federal Trade Commission.

Analysts said attention is now shifting to whether Intel can translate the partnership into operational and competitive gains.