AMD, Nvidia Shares Surge On Intel News

SUNNYVALE, Calif. (TheStreet) -- Shares of AMD(AMD) and Nvidia(NVDA) rocketed Monday following news that Intel(INTC) is canceling its Larrabee graphics chip.

Nvidia's stock surged $1.88, or 13.18%, to $16.14, reversing the modest dip in tech shares that saw the Nasdaq fall 0.05%. AMD's shares were also on the rise as investors digested the news from rival Intel. After the market closed on Monday, the chipmaker's shares rose 66 cents, or 8.4%, to $8.52.

Larrabee, aimed at the lucrative video game and high-performance computing markets, was supposed to debut this year, but Intel delayed the launch until 2010. Now Intel has changed its strategy again.

"Larrabee silicon and software development are behind where we had hoped to be at this point in the project," wrote Nick Knupffer, an Intel spokesman, in an email to TheStreet. "As a result, our first Larrabee product will not be launched as a standalone discrete graphics product, but rather be used as a software development platform for internal and external use."

Earlier this year, Intel failed to impress investors with Larrabee during the initial demonstration of the chip's graphics performance. Intel says that Larrabee is a complex, multi-year project and that it is still heavily committed to graphics technology.

"Additional plans for discrete graphics products will be discussed sometime in 2010," added Knupffer. "Our plans to deliver the world's first CPUs with integrated graphics this month are unchanged."