TLDR
- Intel approached Apple about potential investment to support turnaround strategy
- INTC stock jumped 6.4% Wednesday on Bloomberg report about Apple talks
- Intel previously secured $5 billion from Nvidia and $2 billion from SoftBank investments
- US government holds 10% stake in Intel through August deal
- Seaport Research upgraded Intel stock but warns of manufacturing strategy concerns
Intel stock surged 6.4% to $31.22 Wednesday after reports emerged that the chipmaker approached Apple about securing strategic investment. INTC shares extended gains 3.6% in premarket trading Thursday.
The discussions between Intel and Apple remain preliminary and may not result in any deal. Representatives from both companies declined to provide comments on the reported investment talks.
Strategic Investment Push Accelerates
Intel CEO Lip-Bu Tan has actively pursued partnerships to support the company’s turnaround efforts. The potential Apple investment would follow recent funding from major tech players.
Nvidia committed $5 billion to Intel last week for PC and data center chip collaboration. SoftBank Group invested $2 billion in Intel last month as part of its US expansion strategy.
Intel has contacted additional companies about possible investments and partnerships. The chipmaker seeks validation for its comeback strategy through external backing.
Apple previously used Intel processors in Mac computers before transitioning to proprietary chips starting in 2020. Apple acquired most of Intel’s modem chip business in 2019 for strategic reasons.
Government Backing Provides Foundation
The US government acquired roughly 10% of Intel through an August deal brokered by the Trump administration. This federal investment supports domestic semiconductor manufacturing priorities.
Intel stock has climbed over 60% since early August when the government investment was announced. Year-to-date gains now exceed 56% through Wednesday’s close.
The chipmaker faces major challenges despite recent investor optimism. Intel has lost technological advantages to competitors like AMD and Nvidia in key markets.
Manufacturing Strategy Questions Persist
Seaport Research upgraded Intel from Sell to Neutral but maintains concerns about the company’s direction. Analyst Jay Goldberg suggests Intel should consider selling manufacturing operations.
Intel continues pursuing its foundry strategy under Tan’s leadership but with increased caution. The company has laid off workers and delayed factory expansions due to financial pressures.
Nvidia’s investment notably didn’t include commitments to use Intel’s manufacturing facilities over Taiwan Semiconductor. Intel’s AI strategy remains underdeveloped compared to competitors.
Apple CEO Tim Cook expressed support for Intel’s comeback during recent interviews. Cook stated that increased competition would benefit the chip foundry industry overall.
Intel stock trades at $32.35 in premarket Thursday as investors await developments in strategic partnership discussions.
