Intel (INTC 3.30%) stock gained ground Monday following reports that Apollo Global Management is interested in making a big investment in the company. The semiconductor specialist’s share price closed out the daily session up 3.3%. Shares had been up as much as 4.5% earlier in the day.
On Sunday, Bloomberg published a report stating that Apollo was interested in investing as much as $5 billion in Intel. The news followed reports published last Friday that Qualcomm was interested in acquiring parts of Intel’s business or pursuing a full-on merger.
Outside investment could help support Intel’s turnaround
Intel’s business has been struggling as it aims to fend off competition, gain ground in artificial intelligence (AI), and build up its third-party chip fabrication business. Along with worse-than-expected earnings and forward guidance, the second-quarter report published by the company in August arrived with news that the company is pursuing major restructuring initiatives and plans to lay off 15% of its global workforce. At the same time, the company is also facing the need to make big investments if it hopes to be a real player in AI and improve and ramp up its fabrication capabilities.
Amid rising uncertainty surrounding the company’s future, reports have emerged that Intel could sell off some of its businesses or even wind up fully being taken over by Qualcomm. The report that Intel could receive substantial investment from Apollo suggests that the semiconductor company still has multiple options at its disposal, and investors bid up its share price in response.
What comes next for Intel?
Intel’s path forward remains uncertain, and there’s a good chance that the stock will continue to see significant swings as new reports and speculation about the company’s future emerge. While Intel’s share price could surge if Qualcomm acquires the company, there could be regulatory roadblocks, valuation concerns, and other factors that would prevent a potential combination.
Right now, it looks more likely that Intel will seek new funding from outside investors and public sector sources or sell off pieces of its business. The company’s stock could get a boost if initiatives along these lines are successful, but the business’ long-term outlook remains complicated and is shrouded by uncertainty.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Qualcomm. The Motley Fool recommends Intel and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.
