The development is part of a commitment from both sides to invest in advanced technology and semiconductor innovation in the U.S.
Intel Corp. (INTC) stock surged nearly 5.5% in extended trading on Monday after the struggling chipmaker announced that the company struck a deal with Masayoshi Son-led SoftBank (SFTBY) regarding a $2 billion strategic investment.
The two companies have signed a definitive securities purchase agreement under which SoftBank will make a $2 billion investment in Intel stock. This would give the Japanese investment firm a roughly 2% stake in Intel (based on the $103.56 billion market cap as of the close on Monday).
The development is part of a commitment from both sides to invest in advanced technology and semiconductor innovation in the U.S.
In a statement, Intel CEO Lip-Bu Tan said, “We are very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership.”
Son, meanwhile, said, “This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role.”
Following the announcement, Intel was among the trending stocks on Stocktwits. Sentiment toward the Intel stock remained ‘extremely bullish’ (95/100), with the message volume on the stream at ‘extremely high’ levels.
The 24-hour message volume change leading up to late Monday was about 670%.
A bullish watcher saw shorts getting burnt. “$INTC screw the shorts. Anti American doesn’t work with this agenda,” they said.
Short interest in the stock is at 2.75%, according to Koyfin, nearly doubling from February 2024.
Another user saw the stock climbing past $27 in overnight trading.
Prior to the announcement, a Bloomberg report said the U.S. government was considering picking up a 10% stake in Intel. President Donald Trump met with Tan last week in the White House after the former took potshots at the Intel CEO over his investments in Chinese companies.
Intel has lagged behind its peers in the artificial intelligence (AI) race and has suffered in its core business segments due to product missteps and execution issues. It began rightsizing operations in a big way after Tan, a former Cadence Design Systems executive, took over the helm in March.
Since then, the company has announced shelving foundry plans and laying off employees in a bid to conserve cash.
Baird analyst Tristan Gerra previously suggested TSMC (TSM) could take a minority interest in Intel’s fab, adding that a joint venture outcome would be a positive catalyst for the stock.
Intel stock has risen 18% for the year amid the rightsizing initiatives.
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