Rumor Mill is working overtime with the struggling Intel (INTC) as Tech Icon is considering ways to generate shareholder value.
Chip rivals Taiwan Semiconductors (TSM) and Broadcom (AVGO) are each looking at deals with Intel, which could potentially dissolve the company, the Wall Street Journal reported over the weekend.
Broadcom is reportedly trying to gain control over Intel’s lucrative chip design and marketing business. Taiwan Semiconductors are reportedly studying the control of some or all of Intel’s chip-making plants.
An Intel spokesman did not immediately return a request for Yahoo Finance’s comment.
The farewell could extract substantial value into the long suffering of Intel shareholders, estimates Evercore analyst Mark Lipathys.
In an analysis of Intel’s business, Lipacis said Intel is worth $167 billion or $38.24 per share. Intel shares closed at $23.60 on Friday, down about 50% over the past year. Over the past five years, stocks have hit a market capitalization of 65%, at a market capitalization of $102 billion.
Lipacis uses a more robust forecast of the financial performance of each business to estimate Intel is worth $237 billion or $54.18 per share.
The road to trading may be tough, Lipathy said.
“Depending on the structure of the transaction, regulatory approvals from countries around the world, including China, may be required. Also, Intel has historically designed factories to manufacture X86 CPUs. It is not clear whether Intel’s factories can create externals. Efficiently on current physical plants, Intel’s Foundry Business reported an operating loss of 76% in 2024.
Wall Street analysts at Raymond James, Bank of America and Bernstein reflect concerns over regulatory hurdles and antitrust issues, saying, “Potential INTC splits are time-consuming and complicated.” “It could be.”
Furthermore, transactions related to TSMC and Intel’s manufacturing industry face tight constraints given Intel’s Chips Act financing rules.
The Trump administration could be “watching vigilance of foreign companies that take over the iconic US companies that are deeply involved with US Department of Defense customers,” Aria wrote.
“The better outcome for the US government is to work individually with TSM to expand its US manufacturing footprint,” Raymond James analyst Srini Pajli said in a memo.
The story continues
Intel was awarded $3 billion in US government funding in September to manufacture military chips.
Bernstein analyst Stacey Lasgon said Broadcom would be a good candidate to take over Intel’s product business. “Hock (Tan) demonstrates its ability to mercilessly spend hatch on costs while maintaining innovation,” Rasgon wrote about Broadcom’s CEO in a note Tuesday morning.
Intel Store on Promenade Street, Davos, Switzerland on January 21, 2025 (ÖmerSercanKarku/Anadolu via Getty Images) ・Annadoll via Getty Images
Intel endured challenging months. The high-tech icon parted ways with CEO Pat Gelsinger, who fought on December 1st.
Gelsinger led an aggressive effort to turn the troubled US chipmakers around for over three years. He has promised high-speed AI chips that can cut thousands of jobs, improve costs, secure chip funding, build chip foundries, and compete with NVIDIA (NVDA) and AMD (AMD).
Intel has designated CFO David Zinsner and former client heads as former client heads who will be computing to interim CO-CEOS. Holthaus has also been appointed CEO of Intel Products.
Intel is likely to meet the CEO role by introducing top names from outside the company, a Wall Street source told Yahoo Finance since Gelsinger’s departure.
A permanent CEO must repair trust with investors and make decisions about the casting business after a lack of financial goals. You also need to stabilize your finances immediately.
This adds to the high possibility that the company will likely seek to part ways to promote shareholder value.
Intel’s fourth quarter sales fell 7% year-on-year to $14.3 billion. Net profit fell 76%.
The company is predicting that it will break the profit line again this year.
Whatever happens to Intel, it’s important to the US.
“Well, if their processes, technology arms could become a reliable alternative to Taiwanese semiconductors and Samsung, that would be great for the US. It’s very difficult,” he said, co-founding Microsoft (MSFT). Bill Gates told me about Yahoo Finance’s opening bid podcast (video above, listen below).
Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozzi on X @Briansozzi, Instagram and LinkedIn. A hint for the story? Please email brian.sozzi@yahoofinance.com.
Laura Bratton is a reporter for Yahoo Finance. Follow her at Bluesky @laurabratton.bsky.social. Email her to laura.bratton@yahooinc.com.
Click here for the latest technology news that will affect the stock market
Read the latest financial and business news from Yahoo Finance
Adnan is a passionate doctor from Pakistan with a keen interest in exploring the world of politics, sports, and international affairs. As an avid reader and lifelong learner, he is deeply committed to sharing insights, perspectives, and thought-provoking ideas. His journey combines a love for knowledge with an analytical approach to current events, aiming to inspire meaningful conversations and broaden understanding across a wide range of topics.
