Nvidia (NVDA), Advanced Micro Devices (AMD) Shares Jump after Intel Scraps Plan for New Graphics Chip
December 08, 2009 8:27 AM
Shares of Nvidia Corp. (NYSE: NVDA) and Advanced Micro Devices Inc. (NYSE: AMD) jumped after rival Intel Corp.Shares of Nvidia Corp. (NYSE: NVDA) and Advanced Micro Devices Inc. (NYSE: AMD) jumped after rival Intel Corp. (NASDAQ: INTC) scrapped plans to make a new graphics chip that would have challenged both companies.
Nvidia's stock rose $1.83, or 12.8%, to at $16.09, while AMD's gained 66 cents, or 8.4%t, to $8.52. AMD's stock was also upgraded.
The gains signaled investors' relief that Nvidia and AMD won't have to square off -- at least immediately -- against the world's biggest semiconductor maker in the market for standalone, or "discrete," graphics chips.
Intel disclosed that it no longer plans to release a chip code-named Larrabee to the general public as planned next year, saying the "silicon and software development are behind where we had hoped to be at this point in the project." The company had a lot riding on Larrabee, if only mainly in regard to its reputation.
Intel heavily hyped the chip as a challenge to Nvidia and AMD. Because of Intel's size -- Intel's $112 billion market capitalization is 20 times AMD's size and about 13 times Nvidia's -- it can be a major threat in any market it throws itself into. But graphics has been a problem.
