Stocks are setting new highs once again after Nvidia’s blockbuster Intel deal

• US stocks hit fresh records on Thursday as the Nvidia-Intel deal unleashed a rally in chip stocks.

• Nvidia will invest $5 billion in Intel, and the chipmakers will develop custom products together.

• Intel, Synopsys, and ASML were among the top movers in the morning.

Nvidia, once again, has stolen the show — specifically the chip titan’s announcement of a massive investment in a struggling rival.

The S&P 500 and the Nasdaq Composite touched fresh records on Thursday, with the indexes coming to life after a tepid response to a widely expected rate cut from the Federal Reserve on Wednesday.

The catalyst? A $ 5 billion deal between Nvidia and Intel, which sparked a big rally led by chip stocks in early morning trading.

Nvidia shares ticked rose 3%, while Intel soared as much as 28%. That puts Nvidia up 30% for the year, while Intel is up about 53% year-to-date.

Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Thursday:

Here were the biggest gainers in the market:

The two chip giants said they would jointly develop custom products, with Nvidia incorporating some of Intel’s chips into its AI infrastructure for datacenters, while Intel incorporates some of Nvidia’s chips into its PC systems.

“This is a game changer deal for Intel as it now brings them front and center into the AI game. Along with the recent US Government investment for 10% this has been a golden few weeks for Intel after years of pain and frustration for investors,” Dan Ives, an analyst at Wedbush Securities, wrote in a note.

The good news is coming after a disappointing Fed day for markets. The central bank issued its widely anticipated 25 basis-point rate cut after its policy meeting on Wednesday.

Investors appeared to sell the news as the cut was priced in for weeks leading up to the meeting, Art Hogan, chief market strategist at B. Riley Wealth, told BI.

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