Why Intel stock is winning today

Intel (INTC 4.16%) the stock is rising in Thursday’s trading. The company’s stock 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 that Nvidia (NVDA -3.36%) published yesterday in the second quarter results. But while Nvidia’s T2 report was enough to generate gains for Intel and other players in the artificial intelligence (AI) space, it wasn’t enough to push its own shares higher: The company’s share price fell 3 .5% at the time of writing this article.

Nvidia’s T2 report shows demand for AI remains very strong

Investors were looking to Nvidia’s T2 report for clues about trends in the AI ​​market, and the company provided a wide range of positive indicators. The company reported non-GAAP (generally accepted accounting principles) adjusted earnings per share of $0.68 on revenue of $30 billion, which came in significantly better than the average analyst estimate for earnings per share of 0, $64 on sales of $28.7 billion.

Crucially, the company’s AI-powered data center segment saw revenue grow 154% year-over-year to $26.3 billion. The performance contributed to a 122% year-over-year increase in total revenue. With the company posting an adjusted gross margin of 75.7% in the period, it’s clear that Nvidia’s advanced processors still hold very strong pricing power.

Intel aims to become more competitive with Nvidia in data centers, and signs of strong demand in the space suggest the overall market opportunity has continued to expand. So while Nvidia’s second-quarter results and forward-looking guidance weren’t enough to drive its stock higher today, the report generated gains for many other stocks with exposure to AI trends.

Intel investors actually got some bad news today

With its latest quarterly report, Intel detailed a massive restructuring plan that included laying off more than 15,000 employees. Today, it was revealed that Republican Senator Rick Scott sent a letter to Intel CEO Pat Gelsinger demanding more information about why the company implemented such dramatic cuts despite receiving $8.5 billion in direct funding through the CHIPS and Science Act and an additional amount. loans of 11 billion dollars.

The letter suggests that Intel could face additional scrutiny over the grants and loans it receives from the Commerce Department and that there could be hurdles for the semiconductor company to receive more public funding.