Why Intel Stock Is Sinking Today

Shares of Intel (NASDAQ: INTC) are losing ground in Wednesday's trading. The semiconductor company's share price was down 5.6% as of noon ET and had been down as much as 7% earlier in today's trading.

Intel's pullback comes on the heels of a 16% jump for the stock in yesterday's trading following a report that the company could sell its Altera division and other acquisition speculation. But investors are weighing the outlook on potential sale scenarios for Intel, and the company's share price is also being pushed lower due to tariff news.

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Intel stock cools off after yesterday's big rally

The stock has been gaining ground lately amid reports that Taiwan Semiconductor Manufacturing (or TSMC) and Broadcom are potentially interested in taking over different parts of the company. While Broadcom would potentially be buying Intel's chip design business, TSMC would be buying the chip fabrication unit or operating it through a joint venture with Intel.

The company's stock also got a boost yesterday after Bloomberg reported that Silver Lake Management had nearly completed a deal to buy Intel's Altera division, which focuses on field-programmable gate array (FPGA) chips. But investors are cooling a bit on the acquisition speculation today, with some coverage suggesting that the sale of Intel's design business could face roadblocks due to shared licensing agreements with Advanced Micro Devices.

The share price is also facing downward pressure due to news that the Trump administration is considering a new 25% tariff on a wide range of foreign goods including semiconductors. Intel manufactures many of its own chips, but the company still relies on TSMC for the manufacturing of some of its most advanced processors. As a result, that means Intel would likely be subject to new tariffs.

What comes next for Intel?

The company appears to be on the verge of some major structural changes. It's too early to say exactly how potential spinoffs, acquisitions, or joint ventures might shake out, but it's possible that upcoming deals will wind up unlocking substantial value for shareholders.

Intel's business has struggled in recent years as its chips have lost market share to competitors in key categories, and losses from its foundry operations have mounted. But the company has resources that could be valuable to other semiconductor companies and broader U.S. strategic interests.

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Keith Noonan has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short February 2025 $27 calls on Intel. The Motley Fool has a disclosure policy.