Intel's stock shot up Monday on news that the company is in talks to make chips for Apple, a deal that helped push the S&P 500 and the Nasdaq to fresh all-time highs. The potential partnership would put Intel inside iPhones and Macs for the first time in years, marking a major shift for both companies.
Why Intel's stock jumped
Shares of Intel rose more than 6% in afternoon trading as investors bet that Apple, which has long used its own chip designs and relied on Taiwan Semiconductor Manufacturing Co. for production, is looking to diversify its supply chain. Intel's advanced fabrication plants, including new facilities in Arizona and Ohio, could give Apple a second source for its most critical components. The move comes as geopolitical tensions make sole reliance on Asian foundries riskier.
Neither Intel nor Apple has confirmed the talks, but the market is already pricing in the potential win. Analysts estimate that Apple's chip business could bring Intel billions in annual revenue, though any deal would take years to ramp up.
Record highs for S&P 500 and Nasdaq
The broader market also rode the Intel wave. The S&P 500 closed at 5,200.45, up 0.8%, while the Nasdaq gained 1.2% to hit 16,400.12. Tech stocks led the rally, with chipmakers across the board benefiting from the supply-chain diversification narrative. Advanced Micro Devices and Nvidia also notched gains, though Intel's move was the clearest signal that the industry is rethinking decades-old sourcing strategies.
A shift in chip supply chains
The potential Apple deal highlights a broader trend: companies with advanced fabrication capabilities are positioned to win as the world moves away from concentrated chip production. For decades, most cutting-edge chips came from TSMC and Samsung. But recent U.S. legislation, including the CHIPS Act, has spurred domestic builds. Intel is spending more than $100 billion on new factories across four states.
Apple, which designs its own A-series and M-series chips, has been TSMC's biggest customer. Adding Intel as a second supplier would give Apple leverage and redundancy. It would also validate Intel's foundry business, which the company has been trying to grow under CEO Pat Gelsinger. If the deal goes through, it could pull other major designers toward Intel's fabs.
What's still unclear
The exact timeline and terms remain unknown. Apple could use Intel for older chip designs or for specific components rather than full processors. Intel's manufacturing technology still lags TSMC's in some areas, and Apple is known for exacting standards. Any announcement would likely come after Apple's next product cycle, possibly in late 2025. Investors will watch for any mention of chip sourcing during Apple's earnings call next month.
