Why Intel Stock Is Sinking Today

Intel (NASDAQ: INTC) stock is selling off again in Tuesday's trading. The semiconductor company's share price was down 4.5% as of 3 p.m. ET and been down as much as 8.7% earlier in trading.

Investors are selling out of Intel stock after Taiwan Semiconductor Manufacturing's CEO visited the White House yesterday and announced a $100 billion investment to expand its U.S. manufacturing capacity. Some investors have been hoping that TSMC will buy Intel's foundry business, and yesterday's news left them disappointed.

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Intel stock slumps following news of TSMC's $100 billion investment

Intel's valuation is sinking today as investors weight the possibility that a potential bullish catalyst for the stock might not come to pass. The stock rose early in yesterday's trading as excitement built that TSMC CEO C.C. Wei could announce an acquisition of Intel's foundry unit or partnership to run the business, but the gains quickly reversed after no news arrived on that front. Adding another layer of bearish complexity to the situation, TSMC's $100 billion investment in U.S. operations could mean that Intel's foundry business will be facing much more competition on its home turf.

What's next for Intel?

News of potential spinoffs and acquisitions will likely continue to play a big role in Intel stock's near-term trading. There have been signs that the company is interested in selling its fabrication business, and some investors have been betting that shares could rally if TSMC or another buyer stepped in and acquired the loss-making unit. Broadcom has also been said to have some interest in buying some or all of the Intel's chip design business.

The rise of artificial intelligence (AI) has only added to the importance that domestic semiconductor production holds along economic and national defense lines, and Intel has resources and capabilities that could help it attract buyouts or new partnerships. On the other hand, the business has been facing some significant problems lately -- and investors are understandably concerned that key deals might not come through.

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Keith Noonan has positions in Intel. The Motley Fool has positions in and recommends Intel and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.