Intel Corp (NASDAQ INTC) rose as much as 10% Friday after SemiAccurate reported that a new company is interested in taking over this US-based semiconductor maker.
The news website also added that mainstream media had not previously indicated that a potential buyer, who was not named, was interested in purchasing INTC.
Intel is still struggling to maintain its market share in the face of AMD and NVIDIA, which are now the top choices for businesses seeking advanced AI chips.
Intel’s stock is still down more than half compared to its 52-week peak at the time of writing, despite today’s surge.
Intel acquisition could face obstacles
According to SemiAccurate, the unnamed potential buyer has the resources and the intention to purchase Intel outright rather than just parts.
The internet media outlet received the information first in a confidential e-mail that it confirmed recently from a “highly positioned source”. It’s almost certain that the information is real.
The potential acquisition of INTC is likely to face many obstacles.
Intel continues to be a key player in the global semiconductor supply chains.
To ensure compliance with antitrust law and market stability, any potential agreement will be subjected to intense scrutiny by regulatory authorities.
Intel stock is still attractive to income investors despite the challenges it faces. It pays a dividend yield at this writing of 2.36%.
Qualcomm no longer wants INTC
Bloomberg has also reported that Qualcomm Inc. is no longer interested to buy Intel.
QCOM was reported to be in talks with INTC in September about a possible buyout. The multinational only had $13 billion of cash at the time, compared to Intel’s $50 billion debt.
Analysts believe that Qualcomm’s acquisition of Intel was not feasible.
Intel’s financial results for the fourth-quarter are scheduled to be released in just a few weeks.
It is expected to lose 4 cents per share, compared with earnings of 38 cents.
Is Intel stock a good investment in 2025?
Intel’s credit rating was downgraded by both S&P Global and Moody’s at the end of 2024, due to the uncertainty surrounding its profitability.
Analysts at Mizuho lowered their rating for Intel stock to “underweight” last week.
Their revised price target is $21, which no longer implies a significant upside from current levels.
The investment firm downgraded INTC amid new regulations from the Biden Administration that further limit chip imports to certain countries including China.
Intel’s financial performance could be even more difficult to improve in 2025 if such restrictions are maintained under the new government. Just five years ago, INTC stock was worth $70.
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