Intel shares rise on possible Qualcomm takeover report

Admin I Saturday, Sept. 21, 2024

 

NEW YORK – Intel shares were up on Friday after the Wall Street Journal reported that Qualcomm had recently approached the ailing US chipmaker with a takeover proposal.

Intel’s stock prices rose by more than 3% in US trading. At times, the increase was even greater at over 10%. Intel did not want to comment on the Wall Street Journal report, and there was initially no reaction from rival Qualcomm.

Intel is struggling with high losses and launched a cost-saving programme earlier this year.

The former industry leader plays practically no role in the smartphone business – and Intel is unable to compete with its rival Nvidia for the new chips for applications using artificial intelligence. In addition, Intel is also coming under increasing pressure in the PC market.

Earlier this week the group announced it would postpone the construction of a chip plant in the German city of Magdeburg by around two years, a project estimated to cost billions of dollars.

Industry analyst Patrick Moorhead of Moor Insights said on CNBC that he could certainly see how the two companies’ businesses could complement each other well.

There is little overlap between Intel and Qualcomm’s businesses and technical platforms. However, a takeover deal would likely trigger a thorough review by competition regulators.

Intel’s market capitalization has fallen by more than 50% since the end of 2023, while Qualcomm’s market capitalization has roughly doubled after its share price rose by around a fifth this year. Qualcomm’s shares closed down almost 3% after the Wall Street Journal report was published.