Why Intel Stock Jumped Today
Key Points
Intel announced that it will retain its networking and communications (NEX) unit, reversing earlier plans to divest parts of the business.
The announcement follows recent unconfirmed reports that Intel may resume manufacturing chips for Apple products.
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Shares of Intel (NASDAQ: INTC) rose today, finishing up 2.3%, though it had gained as much as 5.8% earlier in the day. The jump came as the S&P 500 and Nasdaq Composite gained 0.1% and 0.3%, respectively.
Intel stock continued to climb after Wednesday's announcement that the embattled chipmaker would not sell off its networking and communications (NEX) unit.
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Intel keeps its networking unit amid turnaround efforts
Intel had been considering spinning off NEX earlier this year, along with other parts of its business, as part of efforts to streamline operations, cut costs, and shift focus toward artificial intelligence. But in a statement Wednesday, the company said that "keeping NEX in-house enables tighter integration between silicon, software, and systems, strengthening customer offerings across AI, data center, and edge."
Image source: Getty Images.
The decision is significant. It shows Intel's leadership is confident enough in the company's financial situation to prioritize keeping assets rather than selling them to bolster its balance sheet.
Apple manufacturing rumors add to Intel's recent momentum
The announcement came just days after an unconfirmed report claimed the company would resume manufacturing chips for Apple products, like the MacBook Air and iPad Pro.
There's positive momentum behind Intel. And while the road ahead will be bumpy, I believe the momentum will continue. Intel is a solid long-term investment.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Intel. The Motley Fool has a disclosure policy.
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