Intel shares soar nearly 8% after multibillion-dollar chip deal with Amazon | Stock Market News

Shares of Intel Corp. soared as much as 8 per cent on Tuesday after a chip-making deal with Amazon’s cloud business was announced.

At 1:08 pm EDT, Intel shares were at $21.62, up $0.70 or 3.37 per cent.

On Monday, Intel shares had gained 6.4 per cent.

The deal provides some respite to Intel’s investors as the chipmaker’s shares had fallen nearly 60 per cent this year.

As per the multibillion-dollar deal, Intel will build custom artificial intelligence (AI) chips for Amazon Web Services (AWS), expanding a years-long partnership between the two companies.

The work will rely on Intel’s 18A process, an advanced chipmaking technology.

“Today’s announcement is big,” Intel Chief Executive Officer Pat Gelsinger said in an interview. “This is a very discerning customer who has very sophisticated design capabilities.”

AWS is among the first major customers Intel has announced a definitive deal with.

In February, Intel had said Microsoft would use its services to manufacture a custom computing chip.

The US chipmaker is on track to add more than $3 billion to its market value, if gains hold. It fell below $100 billion for the first time in three decades this year.

On Monday, Intel also announced that it is eligible to receive as much as $3 billion in US government funding to manufacture chips for the military.

The effort, called the Secure Enclave, aims to establish a steady supply of cutting-edge chips for defense and intelligence purposes.

Intel also said that it will halt fab projects in Poland and Germany for about two years, raising doubts about the nearly 10 billion euros ($11.14 billion) in subsidies from Germany for its two plants in the country.

The chipmaker is also looking to speed up efforts to execute the $10 billion in cost savings and focus its products better on AI computing.