Intel Stock Surges Over 10% on Speculation of Potential Breakup Deals

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Intel Corp. gained as much as 11% on speculation that the iconic chipmaker could be broken up in a deal involving Taiwan Semiconductor Manufacturing Co. and Broadcom Inc. The reports gave fresh life to the idea of an Intel breakup — a topic of conjecture for investors and analysts since last year. Even the company itself has said that it’s an open question whether Intel might eventually split up its factory and product-development divisions. Intel climbed as high as $26.24 in New York trading, marking the biggest single-day increase since Oct. 27, 2023. The stock was up 18% this year through the end of last week, fueled by the deal speculation.

Intel, once dominant in the chip industry, has struggled to regain its technological edge and lost market share to rivals in recent years. It also missed the shift to artificial intelligence accelerators, letting Nvidia Corp. take a commanding lead in that field. Intel’s board ousted Chief Executive Officer Pat Gelsinger last year after his comeback plan was slow to gain momentum, and the company has been searching for a new leader. The speculation surrounding the potential breakup of Intel has been fueled by reports that TSMC has discussed the idea of operating Intel’s US factories and owning a controlling stake in the venture, while Broadcom has held informal talks with advisers about making a bid for Intel’s chip-design and marketing business.

The potential deal between Intel and its rivals has sparked a lot of interest among investors and analysts, with some seeing it as a way for the company to regain its footing in the industry. However, others are more skeptical about the deal, citing the complexity of the negotiations and the potential geopolitical implications. The deal speculation has also led to a surge in Intel's stock price, with the company's shares gaining over 20% last week. Despite the gains, Intel shares have lost nearly half their value over the past year amid concerns about the chipmaker’s uncertain turnaround plan and inability to capture more of the lucrative AI silicon market.

Some analysts have identified key price levels that investors may be watching out for, including the $26 area, which may provide overhead resistance near the rectangle pattern’s top trendline. A decisive breakout above this level could see the shares climb to around $32, while a longer-term uptrend opens the door for a move up to around $45. On the other hand, if Intel’s share price reverses, investors should keep a close eye on the $19 level, which would likely provide significant support where buyers may seek entry points near the rectangle pattern’s lower trendline. The following are some key points to consider: * The $26 area may provide overhead resistance near the rectangle pattern’s top trendline * A decisive breakout above this level could see the shares climb to around $32 * A longer-term uptrend opens the door for a move up to around $45 * The $19 level would likely provide significant support where buyers may seek entry points near the rectangle pattern’s lower trendline * The deal speculation has sparked a lot of interest among investors and analysts, with some seeing it as a way for the company to regain its footing in the industry.

Ultimately, the potential deal between Intel and its rivals is a complex and multifaceted issue, with many different factors at play. While some analysts are optimistic about the deal, others are more skeptical, citing the complexity of the negotiations and the potential geopolitical implications. As the situation continues to unfold, investors will be watching closely to see how the deal speculation affects Intel's stock price and the company's future prospects. The company's ability to regain its technological edge and compete with its rivals will be crucial in determining its success in the long term.