Intel has experienced a challenging start to 2024, with its stock plummeting over 50% since the beginning of the year, marking a 9.49% decline.
In response, the company’s management appears open to implementing significant changes to halt this downward trajectory, catching the attention of investors. By 10:30 a.m. ET, Intel’s shares had risen by 8% following the announcement that the company had engaged financial advisors to explore strategies for reigniting growth.
Could a company split be on the horizon?
Intel has faced a difficult period over the past few years. Once a dominant force in the semiconductor industry, the company has seen competitors like Nvidia gain ground, prompting a series of restructuring initiatives that have yet to yield the desired results.
On Friday, Bloomberg revealed that Intel had enlisted the help of advisors, including Morgan Stanley and Goldman Sachs, to explore potential strategies. Among these are the possibilities of separating its product design and manufacturing divisions and canceling certain factory projects.
However, the report indicated that no major moves are imminent, with discussions still in the early stages. The management team plans to present various options to the board at a scheduled meeting in September.
Should you consider buying Intel stock?
While it’s clear that Intel must reassess its operations, investors anticipating drastic changes might face disappointment. The report suggests that the company will initially prioritize delaying expansion plans to conserve cash, rather than pursuing divestitures or breakups.
It’s encouraging that CEO Pat Gelsinger and his team recognize that maintaining the current course is not viable. However, until a definitive strategy is outlined, investors should exercise caution before investing in Intel.
