Deal news and rumors push Intel stock higher to start the year

On By Littum

Key takeaways

  • The chipmaker’s shares are rising today along with broader markets, giving them a gain of more than 8% in January, outperforming the S&P 500.
  • Investors may be buying into signs of change in the wake of the retirement of CEO Pat Gelsinger late last year.
  • One such development: news that the company plans to turn its venture fund into a standalone entity, with the company remaining an investor. Meanwhile, takeover rumors continue to swirl.

Intel’s shareholders would probably rather forget 2024. This year has gotten off to a better start.

The chipmaker’s shares are rising today along with broader markets, leaving them up more than 8% in January, outperforming the S&P 500. That doesn’t change the hindsight — Intel ( INTC ) is still more than 50% lower than over the past 12 months – but the signs of life are nonetheless remarkable.

Investors may be buying into signs of change in the wake of the retirement of CEO Pat Gelsinger late last year. One such development that helped lift the stock this week: news that the company plans to spin off its venture fund into a standalone entity, with the company remaining an investor.

“This step supports our broader strategy to maximize the value of our assets while creating greater focus and efficiency across the business,” interim co-CEO David Zinser said of the decision.

Meanwhile, news services circulated a report from a tech newsletter indicating that Intel could be a takeover target. A sale of Intel, currently valued at nearly $85 billion per Visible Alpha, would be a huge deal, but similar narratives have driven interest in the stock in recent months.

Analysts not ready to suggest Intel is a ‘buy’

Intel is scheduled to report its latest quarterly financial results later this month, and investors will certainly watch this announcement and the conference call that follows for clues on how else management might seek to execute that plan.

Wall Street analysts are in wait-and-see mode for now. Visible Alpha doesn’t track a single one with a “buy” rating on the stock — it logs mostly “hold” ratings, with a few “sell” labels — even though the share price upside implied by the average price target is more than 20% from the latest levels.

Deutsche Bank analysts reiterated a “hold” rating earlier this week. “With the company in a temporary position strategically and cyclically, we expect shares to remain rangebound,” they wrote.

Intel shares rose more than 9 percent on Friday.

Update: This article has been updated since it was first published to reflect new share price information.