Intel (INTC) stock climbed more than 5% in premarket trading Tuesday following the announcement that SoftBank Group (SFTBY) will take a $2 billion stake in the ailing chip giant.
It’s been a roller coaster few days for Intel. Last week, Bloomberg reported that the Trump administration was interested in taking its own stake in the company, sending shares higher into Friday. But on Monday, shares fell on reports that the government would buy up as much as 10% of Intel, closing out the trading day down 3.6%.
Shares of Intel are up 18% year to date and 13% over the last 12 months.
The SoftBank Group news comes as Intel continues to navigate its rocky turnaround plan that began under previous CEO Pat Gelsinger. Current CEO Lip-Bu Tan has scaled back Gelsinger’s original vision, canceling construction of international plants and further delaying Intel’s $20 billion Ohio chip complex.
Read more about Intel’s stock moves and today’s market action.
“We are very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership,” Tan said in a statement.
“[SoftBank Group CEO Masayoshi Son] and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment,” he added.
Intel is fighting to bring customers into its third-party chip foundry business as it works to scale its newest 18A chip technology. The company has already signed agreements to build chips on its technology with Microsoft (MSFT) and Amazon (AMZN), but Intel is still the foundry business’s largest customer.
The company is also contending with losing market share in the server business and client computing business to rival AMD, which also benefits from its own AI business. Intel has effectively been shut out of the AI race due to a lack of innovation compared to AMD (AMD) and Nvidia (NVDA).
Intel has gone through a series of major cust-cutting efforts since Tan took over in late 2024, including laying off 15% of its total workforce.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
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