HomeBusinessIntel shares rise after report that chip giant Foundry is considering a...

Intel shares rise after report that chip giant Foundry is considering a split

Intel (INTC) rose on Friday after it was reported that the chip giant was considering major changes, including spinning off or selling its manufacturing business.





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Intel is in talks with investment bankers to explore various options for the semiconductor giant, Bloomberg reported, citing unnamed sources. The company is also considering scrapping factory projects and M&A deals, the report said. Intel is expected to present the options at a board meeting in September, the report said.

Intel shares rose more than 7% to 21.58 in morning trading, helping lift the Dow Industrial Average. The Santa Clara, California-based company has struggled recently against faster-growing rivals led by Nvidia (NVDA) and AMD (AMD). Intel also lags behind its competitors in the hottest trend currently sweeping the tech industry: artificial intelligence.

Intel missed Wall Street estimates when it reported earnings earlier this month. The results prompted Intel to announce a $10 billion cost-cutting plan and suspend its quarterly dividend.

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Intel Stock: Challenging Quarterly Results

The company also issued a bleak outlook. “If Q2 results were contested, the Q3 outlook was terrible (setting a new record for the worst we’ve ever seen at the company),” Bernstein Research analyst Stacy Rasgon told clients in a note.

Spinning off or selling its manufacturing business would be a major change in Intel’s business. For decades, Intel dominated the chip industry with its state-of-the-art manufacturing technology. But the company has lost its dominant position in semiconductor manufacturing in recent years.

Intel shares are down more than 50% this year. The stock has a dismal Relative Strength rating of 6 out of a best-possible 99.

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