Nvidia's $5 billion investment in Intel reignites chips rally; AMD slides

** Intel's shares INTC.O up 26.35% in volatile early trading after Nvidia NVDA.O says it will invest $5 billion in the chipmaker; Nvidia up 2.6%

** INTC set for its best day since October 1987 if gains hold

** Applied Materials AMAT.O, Lam Research LRCX.O, Micron Tech MU.O rise 2.8-4.5%

** AMD AMD.O shares down 4.6% as investment signals a deepening alliance that could sideline the Intel rival in future data center and PC chip collaborations, while threatening its share in AI-driven workloads

** Synopsys up 6.2% on optimism around chip design demand and its role as a key electronic design automation partner to both Intel and Nvidia

** Philadelphia SE Semiconductor Index .SOX hits record high, last up 2.6%

** "Nvidia's $5 billion investment in Intel is less about money and more about influence," said Matt Britzman, senior equity analyst at Hargreaves Lansdown

** "It's a strategic alliance with geopolitical undertones, deepening cooperation between two U.S. chip giants and putting pressure on rivals like AMD and TSMC."

** U.S.-listed shares of TSMC marginally down as move raises the possibility of shifting some manufacturing away from the Taiwanese foundry

** European Semiconductor peers extend gains: ASML ASML.AS, ASM International ASMI.AS, STMicro STMPA.PA, AIXTRON AIXGn.DE up between 6% and 8%

** Nvidia, whose must-have chips are powering a global artificial intelligence boom, said in a statement it will pay $23.28 per share for Intel common stock, a price slightly below $24.90 at which Intel shares closed on Wednesday