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Intel Corp. (NASDAQ:INTC) has sold its stake in Arm Holdings (NASDAQ:ARM), a British chip firm, as part of its ongoing restructuring strategy.
What Happened: Intel, which is currently undergoing a major restructuring, has offloaded its 1.18 million share stake in Arm Holdings, as per a regulatory filing on Tuesday. The sale is estimated to have brought in around $146.7 million, based on the average stock price of Arm between April and June.
“This looks to be consistent with the restructuring plan and the renewed focus on liquidity and efficiency that [CEO Pat] Gelsinger laid out from the last conference call,” Benchmark Co analyst Cody Acree told Reuters.
Intel recently announced a workforce reduction of over 15% and the suspension of its dividend, citing a decline in traditional data center semiconductor spending and a shift towards AI chips.
Intel’s restructuring is part of an effort to regain its technological edge, particularly against competitors like NVIDIA Corp. (NASDAQ:NVDA) and Taiwan Semiconductor (NYSE:TSM).
Despite the ongoing restructuring, Intel’s stock has been struggling, losing over 59% of its value this year. The company’s shares dropped by 26% on Aug. 2, following the dividend suspension.
Why It Matters: Intel’s decision to sell its stake in Arm Holdings comes amid a series of strategic moves aimed at revitalizing the company. Earlier this month, Intel postponed its annual “Innovation” event, initially planned for September, due to financial challenges and a CPU bug controversy. The event is now rescheduled for 2025.
Additionally, Intel has announced plans to cut 15% of its workforce, or about 15,000 jobs, despite receiving $8.5 billion in government grants from the CHIPS and Science Act. This act, signed into law in August 2022, allocated $280 billion for science and technology research, with $52.7 billion earmarked for semiconductor development.
Despite these challenges, some analysts see the potential for a 36% upside, suggesting that the current downturn might present a unique buying opportunity.
Price Action: Intel Corp’s stock closed at $20.47 on Tuesday, marking a significant gain of 5.73% for the day. In after-hours trading, the stock dipped slightly by 0.34%. Year to date, Intel’s shares have experienced a substantial decline of 57.18%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
