Intel has sold its 1.18 million-share stake in British chip company Arm, a regulatory submissionbecause it looks like it’s gaining some momentum again.
The sale, which is likely to earn Intel about $147 million based on Arm’s average share price in the second quarter of 2024, comes during a turbulent period for the chipmaker, which is currently undergoing a major restructuring and cost-cutting effort.
Intel’s decision to sell its stake in Arm is seen as part of a strategy to streamline its operations, and is unlikely to reflect a loss of confidence in the British company.
Intel sells Arm shares
Intel is currently facing fierce competition, especially in the AI chip sector, and is lagging far behind market leader Nvidia, which was previously named the world’s most valuable company in 2024.
In response to increased competitive pressure, Intel announced a $10 billion cost-cutting plan, including a 15% reduction in its workforce. This is one of the largest layoffs in the tech sector in terms of percentage since the pandemic-induced layoff season that began in 2022.
The news sent shares plummeting 26% on Aug. 2. Intel has a market cap of $87.52 billion, compared to $228.41 billion for AMD and $2.856 trillion for Nvidia.
Intel CEO Pat Gelsinger’s strategy is to reposition the company as a leader in developing advanced AI chips and manufacturing them to order, but this has led to rising costs.
In June, Intel reported cash and cash equivalents of $11.3 billion, with total current liabilities of about $32 billion. Intel shares have fallen about 57% since the beginning of the year, after a period of steady decline followed by a sharp drop that occurred after the company’s statement.
When Intel’s Arm news came out, it didn’t have a negative impact on Arm stock. What this move means for Intel, however, is not yet known.
Ny Breaking has asked Intel for comment on the sale of its Arm shares, but the company has not yet responded.