Friday’s CNBC Halftime Report on May 8 featured two very different AI market stories unfolding at the same time. One centered on growing optimism around Cisco Systems (NASDAQ:CSCO | CSCO Price Prediction) ahead of earnings, while the other exploded mid-segment as Intel (NASDAQ:INTC) jumped double digits on reports of a preliminary chip manufacturing agreement with Apple (NASDAQ:AAPL).
The Cisco Options Warning
Options trader Oliver Rennick delivered a warning while discussing Cisco’s earnings setup: “Implied volatility in Cisco is the highest in more than a year. Paying up for these calls ahead of earnings is basically the options equivalent of accelerating into the turn.” Call volume was running more than four times the put volume, while one of the biggest trades highlighted on air was a roughly $200,000 purchase of 95-strike calls betting on another move higher after earnings. Cisco reports earnings after the market’s close on Wednesday, May 13.
Part of the enthusiasm comes from genuinely strong fundamentals. Cisco posted Q2 FY2026 revenue of $15.35 billion, with networking revenue rising 21% year over year. AI infrastructure orders from hyperscalers also reached $2.1 billion, reinforcing the company’s growing role in AI networking demand. But the discussion on CNBC focused less on the business itself and more on the expectations embedded in the stock.
One longtime Cisco shareholder called into the show and admitted the rally was “making me a little queasy, not a lot, but a little,” while adding that he planned to hold through earnings in hopes of another breakout move. Investors increasingly agree that Cisco is benefiting from AI spending, but the question is whether the stock has already priced in too much good news.
Intel’s rally was a different kind of story.
The Intel-Apple Breaking News
Midway through the segment, attention shifted abruptly as Intel jumped more than 15% intraday on reports of a preliminary manufacturing agreement with Apple. The deal would mark a major reversal from Apple’s 2020 transition away from Intel chips toward its own in-house silicon. The stock is now up more than 113% over the past month and nearly 500% in the past year as investors increasingly re-rate the company around its foundry business and AI manufacturing potential. Recent enthusiasm has included optimism around NVIDIA Rubin systems and Google Xeon deployments.
Apple also traded higher on the news, reaching fresh all-time highs. The company’s latest results already showed strong momentum, including 22% iPhone sales growth, 16% services growth, and R&D spending climbing to roughly 10% of sales. That level of investment signals Apple is still pushing aggressively into future hardware and AI product development.
What It Means
What stood out to me from this segment is that the AI trade is starting to split into two very different categories.
You have stocks like Cisco, where investors already believe the story and are now aggressively positioning for near-perfect execution. The business is performing well, but expectations may be rising even faster than the fundamentals. Then you have a company like Intel, where the market is still trying to figure out whether something bigger has fundamentally changed. A potential Apple manufacturing relationship changes how investors view Intel’s long-term position in the semiconductor ecosystem and the AI supply chain.
Some AI stocks are now being driven by positioning and momentum, while others are repricing because the market believes their future earnings power may look completely different than it did six months ago. The next phase of this rally will probably depend on separating those two groups correctly.
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