Wall Street analysts are considering the likelihood that storied U.S. chipmaker Intel could be sold for parts amid its current struggles. Intel stock rose Tuesday.
The Wall Street Journal reported Saturday that Broadcom and Taiwan Semiconductor Manufacturing are weighing separate deals that would split up Intel.
Broadcom is interested in Intel's chip-design business. Meanwhile, Taiwan Semiconductor, better known as TSMC, is looking at Intel's chip-manufacturing business, the report said.
On the stock market today, Intel stock jumped 16.1% to close at 27.39. With the move, it broke out of a 14-week consolidation pattern at a buy point of 26.43, according to IBD MarketSurge charts.
On Jan. 13, Intel stock hit a 2025 low of 18.73. That's close to its 15-year low of 18.51, reached on Sept. 10.
BofA Securities analyst Vivek Arya on Tuesday reiterated his underperform rating on Intel stock with a price target of 19.
In a client note, Arya said the multiparty merger-and-acquisition scenarios described in media reports could be "time-consuming and complicated."
For Broadcom, a deal would add debt and extend regulatory overhang on the company, Arya said. For TSMC, a deal runs the risk of low synergy and geopolitical issues. Both would require approval from global regulators, most notably China, he said.
On Tuesday, Broadcom stock dropped 1.9% to close at 228.53. TSMC stock retreated 0.6% to 202.74.
Intel Stock Gets Price-Target Hike On Breakup Valuation
Bernstein analyst Stacy Rasgon said Intel's x86 PC and server processor design business could be complementary to Broadcom's portfolio. He noted that the business is "potentially ex-growth" but Broadcom Chief Executive Hock Tan could drive efficiencies in it.
Meanwhile, Intel's chip manufacturing business is an albatross for the company, he said in a client note.
"Unfortunately the manufacturing arm remains extremely impaired, carrying heavily negative gross and operating margins," Rasgon said.
Rasgon reiterated his market perform rating on Intel stock with a price target of 25. He rates Broadcom stock as outperform with a price target of 250.
Evercore ISI analyst Mark Lipacis kept his in-line rating on Intel stock but raised his price target to 27 from 22 based on a "sum-of-the-parts" valuation.
"In light of recent reports citing the potential carve-up of Intel, we believe investors will start assigning a higher probability to a potential Intel break-up and consider valuing Intel's different businesses as standalone entities," Lipacis said in a client note.
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