Intel (INTC 7.88%)) The stock is earning the lift on Wednesday from an interesting commentary from investment banker RW Baird.
Writing about rumors from Asia on Wednesday morning, Baird analyst Tristan Guerra said on Wednesday morning that “Asia” analyst, “Asia “There’s a discussion from the supply chain.” (TSM) -2.17%)). Although details are scarce at this point, investors seem to like the idea of creating a close relationship between the two, and Intel shares had risen 3% as of 11:15am ET.
What we know about Intel and TSMC
At this point, the rumors are exactly that and probably shouldn’t be relied on. In other words, don’t be irrational and enthusiastic about this. But with that warning, here’s what Baird says is going on:
The US government is trying to convince Intel to spin off its semiconductor manufacturing industry. This will be a joint venture between Intel and TSMC. TSMC will then lend some of its semiconductor engineers and expertise to a new joint venture to assist in the process of leaping into the production of advanced 3- and 2-nanometer chips in the US. Chips and chips of other Fabless Semiconductor Company on the contract.
If you make the deal even more sweet, federal money from the Chips Act can be used to subsidize new ventures to run, reported TheFly.com.
Is Intel Stock sold?
All of this sounds promising, but Gerra isn’t ready to call Intel Stock a purchase based on it. He maintains a neutral rating until rumors are confirmed. I think that’s smart.
Intel is currently unprofitable, with a net loss of $18.8 billion over the last 12 months, and is not expected to return to GAAP (Generally Accepted Accounting Principles) profitability by 2026 yeah. Additionally, the stock will trade in revenues for next year 74 times, based on the $0.29 per share that analysts expect it to make.
I might buy Intel stocks one day, but today is not that day.
Rich Smith has no position in any of the stocks mentioned. Motley Fool has positions in Intel and Taiwan’s semiconductor manufacturing industry, and is recommended. Motley Fool recommends the following options: A short $27 phone with Intel in February 2025. Motley Fools have a disclosure policy.
