Intel has recently sold its 1.18 million-share stake in the British semiconductor company Arm, according to a new regulatory filing. This move is part of Intel’s broader efforts to regain its footing during a challenging period marked by substantial restructuring and cost-cutting initiatives.
The sale, which likely earned Intel approximately $147 million based on Arm’s average stock price in the second quarter of 2024, is seen as part of Intel’s strategy to streamline its operations. This action is not necessarily indicative of a loss of confidence in Arm but rather a step towards realigning Intel’s focus.
Intel is currently contending with fierce competition, particularly in the AI chip sector, where it trails significantly behind Nvidia, the industry leader which was the world’s most valuable company earlier in 2024. In response to this competitive pressure, Intel has announced a $10 billion cost-cutting initiative, which includes reducing its workforce by 15%—one of the most significant tech layoffs since the pandemic-triggered reductions that began in 2022.
Following this announcement, Intel’s stock experienced a dramatic 26% drop on August 2. The company now holds a market capitalization of $87.52 billion, contrasted with AMD’s $228.41 billion and Nvidia’s staggering $2.856 trillion.
Intel CEO Pat Gelsinger aims to reposition the company as a leader in advanced AI chip technology and contract manufacturing. However, this strategic shift has been accompanied by rising costs.
In June, Intel reported cash and cash equivalents totaling $11.3 billion against total current liabilities of approximately $32 billion. The company’s stock has decreased by about 57% since the start of the year, following a period of steady decline exacerbated by recent announcements.
Despite Intel’s sale of its Arm shares, there has been no adverse impact on Arm’s stock. The full implications of this decision for Intel’s future remain to be seen, as the company has not yet provided further comments.
