It’s been a rollercoaster week for Intel. The tech giant, which has lost more than half its value this year, has made headlines with big announcements that have left Wall Street uncertain about its future.
On Monday, Intel revealed that it is splitting its manufacturing division from its core business of designing and selling processors. The move comes after a tough year for the company, including a steep drop in stock value following a disappointing earnings report. Then, on Friday, reports surfaced that Qualcomm was considering an acquisition of Intel, potentially creating one of the biggest tech deals of all time. However, it is not clear whether the talks have actually started and both the companies have not commented on the rumors.
Despite these challenges, Intel’s stock rose 11% this week, marking its best performance since November. But the rally brings little comfort to CEO Pat Gelsinger.He has been struggling since taking office in 2021. Under his leadership, Intel has lost its title as the world’s largest chipmaker and is falling far behind Nvidia in the race for dominance in AI chips.Nvidia is now worth about $3 trillion, 30 times Intel’s market cap of $90 billion.
To help turn things around, Intel announced it would cut 15,000 jobs—about 15% of its workforce. However, Gelsinger insists that Intel will remain an independent company, even though it is creating a separate internal unit for its foundry business, which makes chip factories.
Intel has a tough road ahead. It plans to spend more than $100 billion by 2029 to build factories in four states and hopes to become a major player in AI. But while Intel is spending big, AMD’s core business is struggling as it loses market share and shrinks revenue.
The foundry business, which aims to compete with manufacturing giants like TSMC and Samsung, won’t see meaningful sales from external customers until 2027. Though Intel has landed Amazon as a customer for a networking chip and earlier this year signed a deal with Microsoft for cloud service chips, Wall Street remains cautious about Intel’s future.
With so much uncertainty, only time will tell if Intel can regain its position as a top player in the tech world.
Read More: Best 7 Small Business Ideas!