Chipmaker Intel Corporation's stock led the semiconductor sector after Federal Reserve Chairman Jerome Powell indicated that conditions were softening for potential interest rate cuts. The rise in Intel's shares came after a disappointing couple of days as investors struggled to reconcile equity investments in the firm with potential equity dilution and continued analyst pessimism about the firm. Joining Intel were other chip designers such as Qualcomm, AMD and Broadcom, all of whose shares jumped by more than 2% while NVIDIA struggled as reports continued to assert that the Chinese government was discouraging local firms from buying its H20 GPUs.
NVIDIA Shares Struggle In Chip Stock Rebound As Worries Persist About H20 GPUs
Speaking at the Jackson Hole conference, Powell remarked that while he was seeing balance in the labor market, it appeared to be stemming from lower demand and supply of workers. However, while the "unusual situation" suggested to him that the labor market appeared to be under stress, the Fed chair warned that inflationary risks from tariffs could lead to a "lasting inflation dynamic" which had to be "assessed and managed."
Powell added that "the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," indicating dovishness, which sent the stock market soaring. Following his remarks, the S&P 500 and the NASDAQ have gained 1.4% and 1.70%, with both indexes being led by major semiconductor stocks in gains.
Leading the pack is Intel, whose shares have struggled throughout the week. The stock gained and then lost 7% after Japanese conglomerate Softbank announced a $2 billion investment in the firm, but reports surfaced that the Trump administration could require it to convert CHIPS Act grants into equity for a potential dilution.
The shares gained as much as 4.5% today for a much-needed respite after this week's volatility. The shares jumped by 7% on Tuesday after Softbank's announcement, but fell by the same percentage the next day after reports surfaced about the Trump administration taking a potential equity stake in the firm. The shares were flat yesterday, and if today's gains hold ground, then Intel's shares will have gained 3% during the week.
However, while Intel led chip stocks in gains, AI giant NVIDIA only added 1.4%. NVIDIA's shares are down by 2.7% this week as multiple reports have claimed that Chinese authorities are pressurizing domestic firms to either not buy NVIDIA's H20 AI GPUs or balance them with domestic alternatives. Heading into earnings next week, analysts speculate that NVIDIA might exclude China sales from its financial figures.
NVIDIA and Intel's smaller rival AMD, memory chip manufacturer Micron and chip designers Broadcom and Qualcomm are all up by more than 2%. Within this list, Broadcom is leading the pack with its 2.5% gain due to its exposure to custom AI chip design. AMD's dual consumer and enterprise exposure and Qualcomm's exposure to consumer spending have also sent the stocks higher.
However, the strongest performer is Tesla, whose shares have gained 5%. Tesla has struggled throughout 2025 due to weak vehicle deliveries and Wall Street appears to be hopeful that lower rates could catalyze its vehicle sales. The stock is down by 11% year-to-date despite attempting to pivot to AI and launching robotaxi initiatives.
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