Intel Shares Climb After Altera Stake Sale, Expense Outlook Cut
The chipmaker's stock rose nearly 3% after it sold a majority stake in its programmable chip unit to Silver Lake, improving its financial forecast.
Intel Corp. (INTC) shares advanced nearly 3% in active trading after the semiconductor giant announced it was lowering its full-year expense forecast. The improved financial outlook follows the to private equity firm Silver Lake, a strategic move aimed at streamlining operations and enhancing profitability.
The transaction, which valued the Altera unit at approximately $8.75 billion, provides Intel with roughly $3.3 billion in proceeds while it retains a significant 49% ownership stake. The deal is a key part of a broader strategy under CEO Pat Gelsinger to sharpen the company's focus on its core business, including its ambitious foundry services expansion and competition in the CPU and GPU markets.
As a direct result of the divestiture, Intel is from $17 billion to $16.8 billion. This financial discipline was well-received by investors, who pushed the stock higher on 1.5 times its average trading volume, signaling strong support for the decision. The move is expected to bolster Intel's balance sheet while allowing it to participate in Altera's future growth.
This divestiture establishes Altera as an independent entity, positioning it to better pursue the growing market for FPGAs (field-programmable gate arrays), particularly in AI-driven sectors like edge computing and robotics. , Altera will now have the operational independence to accelerate its growth and innovation. For Intel, the move represents a and concentrate resources on its primary manufacturing and chip design priorities.