Intel (NASDAQ: INTC) saw its stock price skyrocket by approximately 16% on Tuesday, marking its biggest intraday gain in nearly five years. The surge followed a report from The Wall Street Journal suggesting that Taiwan Semiconductor Manufacturing (NYSE: TSM) and Broadcom (NASDAQ: AVGO) are exploring potential deals to divide the struggling U.S. chip giant.
Intel’s 2024 Selloff and Recent Rally
After suffering a more than 60% decline in 2024, Intel’s stock has been in recovery mode, fueled by speculation of a possible acquisition or partnership. A recent report from Baird suggested a potential collaboration between Intel and Taiwan Semiconductor Manufacturing (TSMC), triggering a massive 24% weekly gain—Intel’s best weekly performance since 2000.
The rally underscores investors’ renewed interest in the company despite ongoing competitive and regulatory challenges. However, as the excitement over a potential deal grows, so do concerns about regulatory approval and integration hurdles.
Regulatory Hurdles Could Block a Deal
Despite the positive momentum, analysts remain cautious. Seeking Alpha Investing Group Leader Tech Stock Pros recommended that investors take profits, citing substantial competitive risks and antitrust concerns that could prevent a deal from materializing.
“The rumored deal is unlikely to go through due to antitrust and competitive issues surrounding TSMC taking over what was meant to be the U.S.’s sweetheart,” wrote Tech Stock Pros. The analyst downgraded Intel to a Strong Sell from Buy, signaling that the stock’s rally may be short-lived.
What’s Next for Intel Stock?
With Intel’s valuation rising sharply on speculation, investors must weigh the potential for a long-term turnaround against the immediate risks of regulatory intervention and industry headwinds. The chip giant’s future remains uncertain as the industry watches whether a deal will materialize or if the recent gains are merely a temporary boost amid market speculation.
