Foundry

Gains

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 Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noreferrer noopener" class="deco-link">website policy</a>&nbsp;prior to making financial decisions.
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<p class="has-drop-cap">Intel Corporation (NASDAQ: INTC) is <a href="https://finance.yahoo.com/news/intel-said-explore-options-cope-030647341.html" target="_blank" aria-label="reportedly exploring a major restructuring (opens in a new tab)" rel="noreferrer noopener nofollow" class="deco-link">reportedly exploring a major restructuring</a> that could see the tech giant split its chip design and manufacturing operations, according to sources familiar with the matter. <br><br>The potential move comes as the company grapples with mounting losses and increasing pressure from investors and lawmakers. Intel’s stock jumped 7.45% to $21.63 in early trading Friday, reflecting investor optimism about the possible shakeup.</p> 
<h3 id="intel-s-foundry-dilemma">Intel’s Foundry Dilemma</h3> 
<p>Intel’s foundry division, which manufactures chips for outside customers, has struggled to gain traction in recent years. CEO Pat Gelsinger, who took the helm in 2021, initially <a aria-label="viewed (opens in a new tab)" href="https://stratechery.com/2023/an-interview-with-intel-ceo-pat-gelsinger-about-intels-progress-towards-process-leadership/" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">viewed</a> the foundry business as crucial to restoring Intel’s standing in the chip industry. However, the company has faced fierce competition in the AI chip market, with rivals like <a href="https://tokenist.com/will-nvidia-deliver-again-in-its-upcoming-quarterly-results/" rel="dofollow" class="deco-link">Nvidia (NASDAQ: NVDA) making significant gains</a>.</p> 
<p>Despite securing nearly $20 billion in U.S. grants and loans to boost chip production, Intel’s recent financial performance has been disappointing. The company reported a net loss of $1.61 billion in Q2 2024, leading to a 26% stock price plunge – its worst single-day performance in over 50 years. In response, Intel has announced plans to lay off about 15,000 employees, representing 15% of its workforce, and aims to reduce costs by $10 billion annually by 2025.</p> 
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<h3 id="intel-stock-has-significantly-underperformed-the-sp-500-year-to-date">Intel Stock Has Significantly Underperformed the S&amp;P 500 Year to Date</h3> 
<p>While Intel’s stock has shown signs of life following news of the potential restructuring, the company’s long-term performance remains a concern for investors. <br><br>Year-to-date, Intel shares have plummeted 56.38%, significantly underperforming the S&amp;P 500’s 17.96% gain. The company’s five-year return of -47.39% stands in stark contrast to the broader market’s 92.38% surge over the same period.</p> 
<p>Intel’s financial metrics paint a mixed picture. With a market capitalization of $92.49 billion and a <a href="https://tokenist.com/investing/p-e-ratio/" rel="dofollow" class="deco-link">price-to-earnings ratio</a> of 83.88, the stock appears richly valued despite its recent struggles. <br><br>The company’s profit margin stands at a slim 1.77%, while its levered free cash flow is negative $10.41 billion. Analyst recommendations for Intel stock are mixed, with an average price target of $26.06.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe> 
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em><br></p> 
<h3 id="br"><br></h3> 
<p>The post <a rel="nofollow" href="https://tokenist.com/intel-mulls-foundry-split-amid-financial-struggles-stock-gains/">Intel Mulls Foundry Split Amid Financial Struggles, Stock Gains</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Intel Mulls Foundry Split Amid Financial Struggles, Stock Gains

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