Nvidia, Advanced Micro Devices lead chips higher as investors await Mobileye IPO
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Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) led the semiconductor industry higher on Tuesday as investors' attention turns towards Intel (NASDAQ:INTC) and the pending spin-off of its automated driving unit, Mobileye (MBLY), slated for later this week.
Shortly before 1 p.m. EST, Nvidia (NVDA) and Advanced Micro Devices (AMD) gained more than 5% each. AMD was approaching its best levels in more than two weeks, while Nvidia (NVDA) climbed steadily higher.
Other chip stocks, such as Qualcomm (QCOM), Monolithic Power Systems (MPWR), Microchip Technology (MCHP) and ON Semiconductor (ON) also saw healthy gains, rising 2% or more.
Texas Instruments (NASDAQ:TXN), which is slated to report third-quarter results after the close of trading, also tacked on more than 1%.
Broadcom (AVGO), Micron Technology (MU) and Qorvo (QRVO) saw more muted gains among S&P 500 components.
Intel (INTC) rose 0.7% in mid-day trading as the Santa Clara, California-based chip giant gets set to spin-off part of Mobileye.
In December, some analysts speculated that Mobileye (MBLY) was worth $50B, but it now looks closer to being worth $16B. For comparison purposes, Intel bought the company for roughly $15.3B in 2017.
Intel (INTC) may raise as much as $820M from selling anywhere between 10% and 20% of Mobileye (MBLY) in the offering at $18 to $20 per share, though it will remain Mobileye's (MBLY) majority owner.
For the six months ended July 2, Mobileye (MBLY) posted revenues of $854M, with gross profit of $405M. It generated an operating loss of $36M and a net loss of $67M during the same time frame.
Mobileye (MBLY) listed a number of competitors, ranging from semiconductor companies such as Ambarella (AMBA), Advanced Micro Devices (AMD) and Nvidia (NVDA), to auto companies including Tesla (TSLA), Google's (GOOG) (GOOGL) Waymo, GM's (GM) Cruise and even Apple (AAPL).
Earlier this month, Nvidia (NVDA) said it was expanding its existing partnership with Oracle (ORCL) in an effort to boost artificial intelligence adoption in the enterprise.