Intel To Buy Nvidia?

Nvidia's share price jumped nearly 10 percent on Wednesday (Oct. 4). The company's shares also slightly fell and hit $31.08 in after-hours trading by late afternoon.

"There is a rumor that Intel is looking at buying Nvidia," said analyst Satya Chillara, who tracks the graphics-chip maker for Pacific Growth Equities LLC.

Chillara also dismissed the rumors, however. "We think it's a stretch," the analyst said. "It's not a very complementary acquisition. Intel already has a strong graphics capability and has hired a lot of graphics specialists."

Plus, the deal could be expensive: Nvidia's market capitalization stands at $11 billion. "That would make it challenging from a valuation standpoint," he added.

Intel may be looking at a response to its bitter rival. In July, Advanced Micro Devices Inc. acquired graphics specialist ATI Technologies Inc. for about $5.4 billion.