Intel shares are rising after a report says it may sell its foundry business

Key recommendations

• Intel is reportedly in talks about a possible spin-off or sale of its foundry division, which makes chips for other companies.

• The company’s shares have fallen 60% this year, becoming the second-worst performing component of the S&P 500 index.

• The company reported a second-quarter loss of $1.6 billion, and analysts were expecting a loss of $1 billion this quarter.

A report that Intel Corp. ( INTC ) is considering spinning off or selling its foundry business lifted shares of the tech giant on Friday.

Intel shares rose nearly 8% after Bloomberg report, which cited people familiar with the matter. An Intel spokesman declined to comment.

Intel’s foundry business makes chips for outside companies. However, a move is not likely in the immediate term, with more options expected to be presented at a board meeting in September, the report said.

Recent fights

Intel shares have fallen 60% in 2024, becoming the second-worst performing stock in the S&P 500.

On Aug. 1, the company said it would lay off 15 percent of its workforce, along with disappointing quarterly results that sent the stock to its lowest level since 2013. Intel posted a second-quarter net loss of 1.6 billion dollars, and analysts expect another billion dollars. losses this quarter, according to the Visible Alpha consensus.

Reports last week said Intel’s progress on building two new chip manufacturing facilities in Germany could be stalled.

Intel’s mobile stock has pushed its market value below a number of other chip giants. It’s a far cry from 2021, when CEO Pat Gelsinger took the reins and the company overtook competitors like Nvidia.

Read the original article on Investopedia.