Why Intel stock is rising today

Intel (INTC 9.12%) has moved in the wrong direction so far in 2024, with the stock losing more than half its value year-to-date.

Management appears to be open to radical measures to reverse the decline, and investors are taking note. Shares of Intel rose 8% as of 10:30 a.m. ET on news that the company has hired bankers to evaluate options to jump-start growth.

Is a breakup in the books?

It’s been a rough few years for Intel. The erstwhile semiconductor maker has lost ground ahead Nvidia and others, leading to a series of restructuring efforts that have so far not had the desired impact.

On Friday, Bloomberg reported that Intel has hired advisers, including Morgan Stanley and Goldman Sachs to formulate options. The company is said to be considering various scenarios, including splitting its product design and manufacturing businesses, as well as abandoning certain factory projects.

The report said no big move was imminent and talks were in their early stages. Management plans to present various options to the board during a regularly scheduled meeting in September.

Is Intel stock a buy?

Intel needs to take a hard look at its operations, but investors hoping for a turnaround are likely to be disappointed. The report says the company will initially focus not on divestments and spin-offs, but rather on holding back on expansion plans to conserve cash.

It’s good that CEO Pat Gelsinger and the rest of the management team realize that the status quo is unsustainable. But until there is a clear plan on how to proceed from here, investors should remain cautious about buying Intel.