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Key Takeaways
- Intel said it will not sell its majority stake in self-driving technology firm Mobileye.
- Selling part or all of Mobileye could have raised some capital as part of Intel’s larger turnaround plans.
- Shares of Intel have lost more than half their value this year but are up this week following an update from CEO Pat Gelsinger.
Intel (INTC) said Thursday it has no plans to sell its majority stake in self-driving technology firm Mobileye (MBLY), ruling out one potential cost-saving option for the beleaguered tech giant.
Intel bought Mobileye for $15.3 billion in 2017 and spun it out into a publicly traded company in 2022. Intel holds about an 88% stake in the company.
Shares of Intel rose close to 2% Thursday, while Mobileye jumped 15% following the statement.
Intel Is Shedding Assets To Cut Costs
Selling part or all of its Mobileye stake was reportedly one of several cost-cutting moves Intel was considering to help stem losses, amid concerns about the company’s ability to turn around the business.
On Monday, CEO Pat Gelsinger said Intel would sell a portion of its stake in its Altera programmable chip unit, and trim its real estate footprint. The company said it is also about halfway to its goal of reducing its headcount by roughly 15,000 by the end of the year.
Analysts Say Intel’s Latest Plans Leave ‘More Questions Than Answers’
Intel shares have gained more than 7% this week after Monday evening’s update from CEO Pat Gelsinger laying out fresh plans for the chipmaker. However, several analysts said they still have concerns about Intel’s next steps.
The vast majority of the 17 analysts surveyed by Visible Alpha held a “hold” rating on Intel stock as of Thursday, with Bank of America analysts writing Gelsinger’s update left “more questions than answers.”
Despite recent gains, Intel’s stock price has fallen nearly 58% since the start of the year, making it one of the worst-performing stocks in the S&P 500.