By Samiat Dec, 03, 2024 Business

However, hurdles remain. For instance, the recently announced CHIPS Act funding includes a stipulation that Intel must maintain at least a 35% stake in its foundry business, limiting its options for a full divestiture.

"Both businesses are facing distinct strategic, structural, financial, and competitive issues, with no clear solutions in sight," BofA analysts wrote. They reaffirmed an "underperform" rating on Intel shares, maintaining a price target of $21. Shares of Intel closed slightly lower on Monday.


Intel's Financial Struggles and M&A Speculation

Intel’s stock has been under pressure, losing more than half its value since the beginning of the year. Nevertheless, the company has occasionally seen short-term gains due to speculation about potential asset sales, investments, or acquisition offers.

Earlier this year, reports of Intel divesting parts of its business and potential takeover interest briefly buoyed its stock. However, these bright spots have been rare, as Intel continues to grapple with operational challenges across both its manufacturing and foundry divisions.


Outlook
A breakup of Intel’s business units could represent a seismic shift for the company, but such a move will need to navigate regulatory conditions tied to government funding and address deep-rooted financial and competitive challenges.

For now, uncertainty clouds Intel’s future as investors await clarity on its strategic direction following Gelsinger’s exit.

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