Qualcomm Inc.’s (NASDAQ:QCOM) interest in acquiring Intel Corp. (NASDAQ:INTC) is reportedly waning due to the "complexities" involved.
What Happened: The challenges of executing such a deal with Intel have cooled Qualcomm’s enthusiasm, Bloomberg reported.
In September, reports suggested that Qualcomm approached Intel for a potential takeover, which would have been a significant merger in the tech sector.
Qualcomm might still consider purchasing parts of Intel or revisiting the idea of a full acquisition in the future.
This comes after Qualcomm outlined its strategy last week to diversify its business, aiming to boost annual revenue by $22 billion by 2029. CEO Cristiano Amon stated in an interview that no major acquisition is currently deemed necessary to achieve this target.
Qualcomm and Intel did not immediately respond to Benzinga’s request for comment.
Intel, once a leader in the chip industry, has faced setbacks, losing ground in the AI chip market.
In August, Intel announced a $10 billion cost-cutting initiative, including workforce reductions and dividend suspension. Analysts have expressed skepticism about the potential deal, citing risks and financial implications for Qualcomm.
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Why It Matters: The potential acquisition of Intel by Qualcomm has been a topic of interest since September, when Qualcomm reportedly considered the takeover amid Intel’s 60% stock decline.
However, antitrust concerns have posed significant hurdles. Furthermore, analysts have expressed doubts about the feasibility of such a merger, citing regulatory challenges.
Adding to Intel’s challenges, the company is set to receive less than $8 billion in federal CHIPS Act funding, a reduction from the $8.5 billion initially planned. This funding cut comes as Intel struggles to meet its revenue targets with its Gaudi AI chips, as noted by CEO Pat Gelsinger during a third-quarter earnings call. The uptake of these chips has been slower than expected, impacting Intel’s financial outlook.
Price Action: Qualcomm stock gained 1.3% on Monday to close at $158.82, while Intel's stock rose 1.5% to close at $24.87. Year-to-date, Qualcomm shares are up 13.3%, while Intel's shares are down 48%, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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