Intel (NASDAQ:INTC) The stock is rising in trading on Thursday. The company’s share price was up 4% at 11:30 a.m. ET, according to data from S&P Global Market Intelligence.
Intel shares are gaining ground thanks to very strong results, which NVIDIA (NASDAQ: NVDA) released its second-quarter results yesterday. But while Nvidia’s Q2 report was enough to send Intel and other artificial intelligence (AI) players into profits, it wasn’t enough to boost its own stock: The company’s share price was down 3.5% at the time of writing.
Nvidia’s Q2 report shows that demand for AI remains very strong
Investors were looking to Nvidia’s Q2 report for clues about trends in the AI market, and the company delivered a wide range of positive indicators. The company reported non-GAAP adjusted earnings per share of $0.68 on revenue of $30 billion, well above the average analyst estimate of $0.64 per share on revenue of $28.7 billion.
Crucially, revenue in the company’s AI-driven data center segment grew 154% year over year to $26.3 billion. This performance helped boost overall revenue by 122% compared to the same period last year. With the company reporting an adjusted gross margin of 75.7% during the period, it’s clear that Nvidia’s advanced processors still have very strong pricing power.
Intel is looking to become more competitive with Nvidia in the data center space, and signs of strong demand in that space suggest the overall market opportunity has continued to expand. While Nvidia’s second-quarter results and guidance weren’t enough to spark a rally in the stock today, the report has helped many other stocks dependent on AI trends to gain.
Intel investors actually received bad news today
In its last quarterly report, Intel laid out a sweeping restructuring plan that includes laying off more than 15,000 employees. Today, it was revealed that Republican Senator Rick Scott sent a letter to Intel CEO Pat Gelsinger asking for more information about why the company is making such drastic cuts when it was set to receive $8.5 billion in direct funding through the CHIPS and Science Act and an additional $11 billion in loans.
The letter indicates that Intel could face increased scrutiny over the grants and loans it receives from the U.S. Department of Commerce and that there could be obstacles to the semiconductor maker obtaining further public funding.
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Keith Noonan does not own any of the stocks mentioned. The Motley Fool owns and recommends Nvidia. The Motley Fool recommends Intel and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.
Why Intel Stock Is Gaining Today was originally published by The Motley Fool
