Intel Corp (NASDAQ: INTC) popped as much as 10% on Friday following a SemiAccurate report that a new name is now interested in taking over the US-based semiconductor manufacturer.
The news website added that the mainstream media has not previously indicated that this unnamed potential acquirer is interested in buying INTC.
The news arrives as Intel continues to struggle to sustain its market share against AMD and NVIDIA, both of which have become the go-to options for businesses looking for advanced AI chips.
Despite today’s surge, Intel stock is down more than 50% versus its 52-week high at writing.
Intel acquisition could face hurdles
According to the SemiAccurate report, the unnamed potential acquirer has the resources and intention to buy Intel outright, rather than parts of it only.
The internet media outlet first received the information in a confidential email that it has recently confirmed from a “highly placed source”. So, it’s now nearly certain that the news is authentic.
Note that the potential acquisition of INTC will likely face numerous hurdles.
Intel continues to be an integral cog in the global semiconductor supply chain.
Therefore, any potential agreement would have to go through intense scrutiny from regulatory authorities to ensure compliance with antitrust laws and maintain market stability.
Amidst challenges, Intel stock remains attractive for income investors as it pays a dividend yield of 2.36% at writing.
Qualcomm no longer wants to buy INTC
Meanwhile, a separate report from Bloomberg suggests Qualcomm Inc is no longer interested in buying Intel.
QCOM was reported in talks with INTC over a potential buyout in September. But the multinational had $13 billion in cash only at the time – versus a much bigger hoard of $50 billion in debt on Intel’s balance sheet.
This may have made it impractical for Qualcomm to take over Intel, as per analysts.
The news arrives only weeks before Intel is scheduled to report its financial results for the fourth quarter.
The consensus is for it to lose 4 cents a share versus earnings of 38 cents per share last year.
Is Intel stock worth buying in 2025?
Intel had its credit rating downgraded at both S&P Global as well as Moody’s in 2024 due to uncertainty surrounding the chipmaker’s profitability.
Analysts at Mizuho also lowered their rating on Intel stock last week to “underweight”.
Their revised price target of $21 no longer suggests a meaningful upside from current levels.
The investment firm downgraded INTC amidst new regulations from the Biden administration that further limit chip exports to certain countries, including China.
If such restrictions continue under the new government, Intel could find it even harder to improve its financials in 2025. Note that INTC was a $70 stock just five years ago.
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