Intel has divested its 1.18 million-share stake in British chip firm Arm, according to a regulatory filing, as it looks to recover some momentum.
The sale, which likely netted Intel around $147 million based on the average price of Arm’s stock in the second quarter of 2024, follows a troubling period for the chipmaker which is undergoing significant restructuring and cost-cutting measures.
Intel’s decision to sell its stake in Arm is considered to be part of its strategy to streamline operations, thus it’s unlikely to be a reflection of lost confidence in the British firm.
Intel sells Arm shares
Intel is currently facing intense competition, particularly in the AI chip sector, where it lags significantly behind industry leader Nvidia, which was the world’s most valuable company for a period earlier in 2024.
In response to increased pressure from competition, Intel announced a $10 billion cost-reduction plan including reducing its headcount by 15% – one of the biggest tech layoffs in terms of percentage since the pandemic-induced layoff season that started in 2022.
The news saw stock plummet by 26% on August 2. Intel has a market cap of $87.52 billion, compared with AMD’s $228.41 billion and Nvidia’s $2.856 trillion.
Intel CEO Pat Gelsinger’s strategy is to reposition the company as a leader in advanced AI chip development and for-hire manufacturing, but this has led to rising costs.
In June, Intel reported cash and cash equivalents of $11.3 billion, with total current liabilities of around $32 billion. Intel stock has been down by around 57% since the beginning of the year, following a period of steady decline followed by a sharp drop that occurred after the company’s statement.
Upon the breaking of Intel’s Arm-related news, Arm stock was not negatively impacted, however what the move means for Intel is yet to be seen.
TechRadar Pro has asked Intel to comment on the sale of its Arm stock, but the company did not immediately respond.
More from TechRadar Pro
https://cdn.mos.cms.futurecdn.net/8zcrXFmwqGhotbwYirbJee-1200-80.jpg
Source link
