Intel Rides Stock Rally Following Key Transaction

Intel stock made headlines on Tuesday following its 16% surge as its rallies behind important news with TSMC and Broadcom.

An Intel logo.

Over the past five days alone, Intel made its biggest gain ever in the history of its stock as investors from all realms of the stock exchange pour in to capitalize on breaking news. The stock has surpassed $27, making new recent highs, and putting it in an excellent position for a recovery from pre-December levels.

The rise of the stock came after news of speculation that Broadcom and Taiwan's TSMC will be considering a breakup plan for Intel.

However, this alone did not contribute to its rise. Under President Trump's "Stargate" venture among others, the U.S. government has expressed strong interest in uplifting the bearish company as the next pioneer for artificial intelligence companies alongside the likes of Nvidia, Meta, Oracle, and others.

Intel gets most of their income from domestic supply and demand here in the United States, however in recent years it has begun to implement an external approach. By grappling with the subsidiary and merger/acquisition process overseas, it has opened up a foundry to take on external consumers and posing a direct risk to Taiwan's TSMC. This was led by CEO Patrick Gelsinger, who at the time was trying to recover Intel's manufacturing dominance which it had earlier in its history.

However, due to his exodus from the company as well as other factors like low demand for Intel chips, big companies like Apple abandoning its chips, and higher success for its competitors, it has been left in the backwater by its competitors like TSMC, Broadcom, and even Nvidia. All throughout 2024, it's earnings have been sub-optimal.

With the company's decline, investors have begun to support a two-stake solution to the company, break it up into two distinct entities. Although very detrimental to the already poor state of the company, it eliminates competition from the market to boom more relevant stocks like Nvidia and Broadcom. This is why its competitors have wanted to buy the company outright so that they could break it up. They specifically want to separate the company's foundry sector from its product sector, which could end the short-term losses that the company has faced. This could also take the form of a subsidiary, Intel officials said.

With a possible acquisition by Broadcom or TSMC possible, especially with recent leaks that they might just do so, the stock surged to record highs in the short-term.