(Reuters) – Intel (NASDAQ:)’s shares rose greater than 3% earlier than the bell on Friday, as a report of the struggling chipmaker exploring choices that would embody a merger or a cut up induced some investor enthusiasm after one of many inventory’s worst slumps in a long time.
The corporate is working with funding bankers and contemplating numerous choices equivalent to separating its flagship product enterprise from its money-losing manufacturing unit, Bloomberg Information reported on Thursday.
Intel can be discussing probably scrapping some manufacturing unit initiatives, the report mentioned.
Constructing and increasing chip manufacturing websites is on the core of Intel’s turnaround efforts centered on changing into a contract producer for different chip corporations – a capital intensive enterprise that has strained the corporate’s funds.
Intel’s market worth was set to rise by practically $3 billion on Friday, after falling beneath the $100 billion mark earlier in August for the primary time in three a long time.
The report offered some aid to traders, a lot of whom see Intel splitting its enterprise as a perfect possibility as the corporate trudges via the AI period and trails chipmakers like Nvidia (NASDAQ:) and AMD (NASDAQ:).
Intel’s shares have fallen about 60% to date this 12 months, in contrast with a lower than 2% year-to-date drop for AMD. Nvidia’s shares have greater than doubled in worth this 12 months.
Intel’s disappointing quarterly report earlier in August, coupled with the corporate pausing its dividend and asserting layoffs impacting 15% of its workforce, have deepened the inventory’s stoop.
The inventory trades at about 24 occasions anticipated earnings, in contrast with a price-to-earnings ratio of 30.6 for AMD. Nvidia trades at 33.7 occasions anticipated earnings.