So, here's a thing you can do when you're a giant chipmaker: you can sell a piece of your factory to a private equity firm to raise some cash, and then a couple of years later, you can buy it back. That's what Intel Corp. (INTC) is doing, and its stock is climbing on the news even as the broader market takes a breather.
The Nasdaq was down about 0.28% and the S&P 500 was off 0.19%, but Intel shares were up more than 3%. The reason? A massive $14.2 billion agreement to repurchase the 49% stake in its Fab 34 joint venture in Ireland from Apollo Global Management (APO).
Buying Back the Factory
This is essentially a reversal of a deal from 2024. Back then, Intel brought Apollo in as a financial partner for the Fab 34 facility. It was a way for Intel to get some funding flexibility to pour into its ambitious plans for advanced chip manufacturing. Now, Intel wants the whole thing back.
The company will pay for it with cash on hand and by taking on about $6.5 billion in new debt. The logic, according to Intel, is that owning 100% of this key asset will be good for business in the long run. They expect the move to boost earnings per share (EPS) and actually improve the company's credit profile—though not until 2027. Fab 34 is a crucial piece of Intel's AI-driven chip roadmap, as it's the plant producing their Intel 4 and Intel 3-based processors.
Governance Questions in the Background
This big financial maneuver comes right on the heels of another, smaller piece of Intel news. The company recently invested another $15 million in an AI chip startup called SambaNova, bringing its total stake to roughly 9%. That move has drawn some side-eye from corporate governance watchers.
The attention is on Intel's CEO, Lip-Bu Tan, and his ties to various startups. Some experts see these overlapping investments as potential "red flags" for governance. Intel, for its part, says it operates under "strict governance policies" designed to protect shareholders. It's a subplot that adds a layer of complexity to the company's current strategy.
Where the Stock Stands
So, what does the market think of all this? The stock's price action offers some clues. At $49.59, Intel was trading about 9.7% above its 20-day simple moving average (SMA) and 15.7% above its 100-day SMA. That suggests the stock has been on a decent run relative to its recent and medium-term history.
Looking at the moving average convergence divergence (MACD), a common momentum indicator, the reading was -0.2585 versus a signal line of -0.3536. The 20-day SMA also remains below the 50-day SMA. Technical analysts might read this as a market that's still in the process of rebuilding momentum after a sell-off in late March.
For traders watching the levels, key resistance—a price where selling might increase—is seen around $51.50. Key support—a floor where buying might pick up—is down around $42.50.
By the end of the day, the news was clearly a positive. Intel shares closed up 3.30% at $49.62, according to market data. It's a vote of confidence, at least for now, in Intel's decision to bring a critical manufacturing asset fully back under its own roof.
