What Happened?
Shares of computer processor maker Intel (NASDAQ:INTC) jumped 4.3% in the morning session after the company lowered its full-year cost outlook upon completing the sale of a majority stake in its Altera programmable chip business.
The company finalized the sale of a 51% stake in Altera to private equity firm Silver Lake for approximately $3.3 billion, while retaining the remaining 49% interest. As a direct result of this transaction, Intel reduced its fiscal 2025 non-GAAP operating expense forecast to $16.8 billion, down from its previous guidance of $17.0 billion. This strategic divestiture and subsequent reduction in expected costs were viewed positively by investors, signaling a move to streamline business operations and improve the company's financial outlook.
After the initial pop the shares cooled down to $25.03, up 4.1% from previous close.
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What Is The Market Telling Us
Intel’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 4.3% on the news that the U.S. government announced it will take a nearly 10% equity stake in the chipmaker through an $8.9 billion investment.
The move came after Intel and the Trump Administration announced an agreement for the U.S. government to make an $8.9 billion investment in the company's common stock. This investment gives the government a 9.9% equity stake in the chipmaker. The funding is sourced from $5.7 billion in grants under the CHIPS and Science Act and $3.2 billion from the Secure Enclave program, effectively converting previously awarded grants into equity.
According to the terms, the government will purchase 433.3 million shares at $20.47 each. This strategic investment is intended to support the expansion of American technology and manufacturing leadership while bolstering the domestic semiconductor industry.
Intel is up 23.8% since the beginning of the year, and at $25.03 per share, it is trading close to its 52-week high of $27.39 from February 2025. Investors who bought $1,000 worth of Intel’s shares 5 years ago would now be looking at an investment worth $500.64.
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