Intel (INTC) shares surged more than 9% Tuesday after SoftBank Group (SFTBY) announced a $2 billion investment in the chipmaker, giving the struggling company a much-needed boost.
The rally caps a volatile stretch for Intel. Last week, Bloomberg reported that the Trump administration was considering taking a stake in the company, lifting shares into Friday. But the stock slid 3.6% on Monday after follow-up reports suggested the government could acquire up to 10% of Intel. Despite the swings, the stock is up 18% year to date and 13% over the past 12 months.
The SoftBank deal comes as Intel continues to overhaul its turnaround strategy. CEO Lip-Bu Tan, who succeeded Pat Gelsinger, has scaled back his predecessor’s ambitious expansion plans—scrapping international projects and delaying the company’s $20 billion Ohio facility.
In a statement, Tan said: “We are very pleased to deepen our relationship with SoftBank, a company at the forefront of emerging technology and innovation. [SoftBank CEO Masayoshi Son] and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.”
Intel is working to win more customers for its third-party foundry business and to scale its advanced 18A chip technology. The company has secured manufacturing agreements with Microsoft (MSFT) and Amazon (AMZN), but it remains its own foundry’s largest client.
Meanwhile, Intel continues to lose ground in both server and client computing chips to rival AMD, which is capitalizing on strong demand for AI hardware. Nvidia (NVDA) has also left Intel behind in the fast-growing AI market, where Intel’s lack of innovation has hindered competitiveness.
Since Tan’s appointment in late 2024, Intel has enacted sweeping cost-cutting measures, including a 15% reduction in its workforce.
News of SoftBank’s investment follows a Bloomberg report last week that said the Trump administration is considering taking up to a 10% stake in the company.
Treasury Secretary Scott Bessent confirmed in a CNBC interview on Tuesday that the investment would involve the US government converting Intel’s grants from the Biden-era Chips and Science Act — worth $10.9 billion — into an equity stake aimed at stabilizing the company’s US manufacturing business. Bessent did not confirm the size of the stake the government would take.
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