After bearing a sharp drop of 11.5% in April, Intel is showing a great comeback with a 3.55% increase on Monday. This increase in Intel’s stock surge is being attributed to the US-China trade deal. 

On 11 May, the US and China agreed to suspend most tariffs on each other’s goods. The two economic giants announced that the reciprocal tariffs will be cut from 125% to 10%. However, the US′ 20% duties on Chinese imports relating to fentanyl will remain in place, meaning total tariffs on China stand at 30%.

The reduction in tariffs could alleviate the supply chain concerns and improve demand visibility for Intel. In 2024, sales from China accounted for about 30% of Intel’s revenue.

Semiconductor Stocks Surged 

With the news of the US-China deal, the semiconductor shares jumped Monday morning. Nvidia, the U.S.’s largest chipmaker, jumped 4.1% to $121.42 in early trading. The iShares Semiconductor ETF rose 6.7%, Marvell Technology surged 7.3%, and Super Micro Computer gained 7.6%. On the other hand, the Nasdaq Composite Index rose 3.5% on the news.

Will New Leadership Cash this Opportunity? 

One of the major reasons for Intel’s low performance in the past three years was its limited adaptability toward the AI boom compared to Nvidia and AMD. Under the new leadership of Lip-Bu Tan, Intel has geared up to mitigate this advancement gap as the company looks forward to advanced chips for AI Data Centers. However, the ban on certain chips by the US to China will remain a bottleneck for Intel as well as other semiconductor companies. 

Tan has promoted Sachin Katti to chief technology officer and chief artificial intelligence officer. He is also formulating a road map and developing an AI ecosystem for the company. Indicating that the new leadership is set to cash the pause on the trade war. 

Moreover,  Intel has shifted its strategic policy and started focusing on the high demand for AI data centres and the ongoing trend of the AI boom, which gives a promising rise to Intel’s stocks for 2025. 

With this 90-day pause on the US-China trade war and ongoing talks, it is expected that the concerns on the demand-supply chain of Intel will be addressed.