Intel (INTC) shares skyrocketed to 5% in premarket trading Tuesday following SoftBank Group (SFTBY) announced a $2 billion stake in the struggling chipmaker.
The investment comes after a disturbing week for the company. Last Friday, reports suggested that the Trump administration was considering getting equity in the company, raising shares.
However, stocks dropped 3.6% Monday after speculation that the government could buy nearly 10% of Intel. Despite the volatility, shares remained up 18% year-to-date and 13% over 2024.
Intel CEO Lip-Bu Tan appreciated the collaboration, underscoring SoftBank's role in emerging advanced technologies.
Tan expressed immense confidence in the partnership by mentioning his long-term alliance with SoftBank CEO Masayoshi Son,
This significant move comes as the company continues its turnaround strategy, which included scaling back international plant construction and postponing its $20 billion Ohio chip complex.
Moreover, Intel is making heavy investments in its 18A chip technology, signing agreements with other tech giants, including Amazon and Microsoft to build cutting-edge chips.
After experiencing setbacks, share losses to Nvidia and AMD in both computing and AI, Intel has executed several cost-cutting measures, including laying off 15% of its workforce.
