Intel shares fell by 6% on Tuesday following reports that CEO Pat Gelsinger is considering selling the FPGA unit, which was previously known as Altera. This potential sale is seen as a move to improve Intel’s balance sheet as the company faces losses from its expansion into third-party chip fabrication. Analysts believe that the unit could be sold to Marvell Technology for between $18 billion and $22 billion. Despite this news, Intel is also partnering with a Japanese research institution to establish a laboratory focused on EUV technology in chip design.
As Intel faces challenges in adapting to the changing semiconductor market, there are rumors that the company may be removed from the Dow Jones Industrial Average. With INTC stock down 59% for the year and showing a consistent decline since reaching an all-time high in August 2000, it currently makes up just 0.35% of the DJIA. Carson Group analysts predict that Intel’s uncertain outlook could lead to its exclusion from the index, similar to when Amazon replaced Walgreen Boots Alliance earlier this year.
The potential removal of Intel from the Dow Jones index highlights the company’s struggles in recent years. Despite attempts to recover from losses by reducing its workforce and ending its dividend, Intel has continued to face challenges. The stock is currently trading below key moving averages on the weekly chart, with little support in sight. The negative sentiment surrounding Intel has led to a significant decrease in its stock price, with potential for further declines in the future.
As Intel evaluates its options for the FPGA unit and seeks to strengthen its balance sheet, the company’s future remains uncertain. The possibility of being removed from the Dow Jones index adds to the challenges Intel is currently facing. With the semiconductor market evolving rapidly, Intel will need to adapt and make strategic decisions to remain competitive in the industry. Investors and analysts alike will be closely watching Intel’s next moves to see how the company navigates these turbulent times and positions itself for future growth.
