Intel stock saw an impressive 8% jump in extended trading on Monday following news of significant developments in the company’s foundry business and an expanded partnership with Amazon. Despite losing nearly 60% of its value in 2024, the chipmaker’s latest strategic moves have boosted investor confidence.
Intel is working to spin off its foundry division into a separate entity, a decision aimed at attracting outside funding. This business, which focuses on manufacturing chips for other companies, has been a major investment for Intel, with the company spending roughly $25 billion on the division in each of the past two years. By separating the foundry business, Intel hopes to better compete with industry giants like TSMC and Samsung, while also reducing financial strain on its core operations.
Additionally, CEO Pat Gelsinger announced an expanded deal with Amazon to produce custom chips for artificial intelligence (AI) applications. This partnership is part of Intel’s broader push to capture a bigger share of the growing AI market. Gelsinger emphasized the importance of AI and custom silicon as critical components of Intel’s future.
The market reacted positively to these moves, as Intel shares saw their biggest gain in weeks. Analysts view the foundry spinoff and the AI deal as crucial steps for Intel to regain lost ground in the semiconductor industry and improve stock performance after a challenging year.
As the company navigates these changes, investors are keeping a close eye on Intel’s ability to secure outside funding for the new foundry subsidiary and deliver on its ambitious plans in the AI space.