Intel (NASDAQ: INTC) has been moving in the wrong direction so far in 2024, with the stock losing more than half its value this year.
Management is reportedly open to radical steps to reverse the decline, and investors are taking notice. Shares of Intel rose 8% at 10:30 a.m. ET on news that the company has hired bankers to evaluate options to revive growth.
Is a rift in the making?
It’s been a tough few years for Intel. The once legendary semiconductor maker has lost ground to Nvidia and others, leading to a series of restructurings that have so far failed to have the desired effect.
On Friday, Bloomberg reported that Intel has hired consultants, including Morgan Stanley And Goldman Sachs to formulate options. The company is said to be considering several scenarios, including splitting up its product design and manufacturing businesses and scrapping certain factory projects.
The report said no major move is imminent and discussions are still at an early stage. Management plans to present various options to the board at a regular meeting in September.
Is it wise to buy Intel stock?
Intel definitely needs to take a hard look at its business, but investors hoping for radical change are likely to be disappointed. The report says the company is unlikely to focus on divestments and breakups at first, but rather on delaying expansion plans to save money.
It’s good that CEO Pat Gelsinger and the rest of the management team realize that the status quo is unsustainable. But until there’s a clear plan for how to move forward, investors should remain cautious about buying Intel.
Should You Invest $1,000 in Intel Now?
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and Nvidia. The Motley Fool recommends Intel and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.
Why Intel Stock Is Rising Today was originally published by The Motley Fool
