What Happened?

Shares of computer processor maker Intel (NASDAQ:INTC) jumped 6.6% in the pre-market session after Reuters reported that Broadcom and Nvidia are running tests on Intel's 18A manufacturing process, highlighting the company's (INTC) progress and the potential to attract high-caliber customers. With high expectations surrounding Intel's Foundry business, these updates lend credibility to the growing hype, and even the speculation about a potential acquisition on the unit, suggesting there may be real substance behind it.

After the initial pop the shares cooled down to $24.43, up 2.7% from previous close.

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What The Market Is Telling Us

Intel’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 13 days ago when the stock gained 10.5% on the news that The Wall Street Journal reported that the company is in talks with Broadcom and TSMC to sell certain assets. Sources revealed Broadcom is interested in Intel's product business, while TSMC is more focused on snapping up and controlling some of its factories. Investors are betting on management to make a move to unlock value in some of its operating segments, given the significant investments that have been made in recent years. The stock's reaction suggests the market sees real potential in a deal with industry peers like Broadcom and TSMC, both leaders in chip design and manufacturing.

Intel is up 20.8% since the beginning of the year, but at $24.43 per share, it is still trading 47.1% below its 52-week high of $46.15 from March 2024. Investors who bought $1,000 worth of Intel’s shares 5 years ago would now be looking at an investment worth $436.43.

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