Intel Stock Surges Amid Acquisition Rumors

Intel's stock saw an uptick of over 8% during late-morning trading on Friday, following news that the struggling chip manufacturer is reportedly being pursued for acquisition.

Rumors of Acquisition

According to a report from the tech newsletter SemiAccurate, an email was received stating that a company is interested in acquiring Intel entirely. This email reportedly took several months to verify, and it specified that the unnamed firm aims to buy Intel's entire business rather than just parts of it.

SemiAccurate explained that although the email was genuine and explicitly indicated interest in acquiring Intel, it was unclear whether this was a strategic plan or simply a notion thrown around by a CEO.

Intel's Recent Struggles

The well-known chipmaker has faced a challenging year, with its shares falling approximately 54%. In December, Intel announced the retirement of its former CEO, Pat Gelsinger, who also stepped down from the board of directors. Gelsinger's exit occurred at a time when Intel was struggling to compete with rivals like Nvidia, which has benefited significantly from the booming artificial intelligence sector.

Intel experienced a notable decline of 27% in August after falling short of revenue expectations in the second quarter and announcing layoffs. Part of the profit miss was attributed to Intel's decision to expedite the rollout of its Core Ultra CPUs, designed specifically to handle AI applications, according to Gelsinger during the earnings call.

Potential Interest from Other Companies

In September, it was reported that chipmaker Qualcomm expressed interest in acquiring certain segments of Intel's chip design units. Additionally, Intel has been collaborating with its long-time investment bankers from Morgan Stanley and Goldman Sachs to explore options for revitalizing its business. These options include potential splits within its foundry division, adjustments to factory projects, and merger and acquisition strategies, as noted by Bloomberg.

There were also discussions regarding a $5 billion investment from alternative asset manager Apollo Global Management.

Government Support and Future Plans

On a more positive note, Intel received significant backing of up to $7.87 billion under the Chips Act in November. This funding is intended to support Intel's ambitious investment of nearly $90 billion in the U.S. by the end of the decade, a part of its larger plan exceeding $100 billion for expanding fabrication and advanced packaging facilities across several states including Arizona, New Mexico, Ohio, and Oregon.

Intel, Acquisition, Stock