Why Intel Stock Soared Today

Intel (INTC 3.30%) the stock gained ground on Monday following reports that Apollo Global Management is interested in making a large investment in the company. The semiconductor specialist’s share price ended the daily session up 3.3%. Shares were up as much as 4.5 percent earlier in the day.

On Sunday, Bloomberg published a report stating that Apollo was interested in investing up to $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 merger.

Outside investment could help support Intel’s turnaround

Intel’s business is struggling as it aims to fend off competition, gain ground in artificial intelligence (AI) and grow its third-party chipmaking business. Along with weaker-than-expected earnings and guidance, the company’s second-quarter report in August came 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 also faces the need to make big investments if it hopes to be a real player in AI and to improve and scale up its manufacturing capabilities.

Amid growing uncertainty surrounding the company’s future, reports have surfaced that Intel may sell some of its businesses or even end up being taken over entirely by Qualcomm. The report that Intel could receive substantial investment from Apollo suggests the semiconductor company still has more options available, and investors are bidding up its stock price in response.

What’s next for Intel?

Intel’s path forward remains uncertain, and there’s a good chance the stock will continue to see significant swings as new reports and speculation about the company’s future emerge. While Intel’s stock price could rise if Qualcomm acquires the company, there could be regulatory roadblocks, valuation concerns and other factors that would prevent a potential combination.

At this point, it seems more likely that Intel will seek new funding from outside investors and public sector sources or sell parts of its business. The company’s stock could get a boost if its initiatives are successful, but the long-term outlook for the business remains complicated and shrouded in uncertainty.