There were those who thought that chip stock Intel (INTC) was making a mistake by aligning itself with SambaNova. A lot of that feeling coalesced around the notion that Intel CEO Lip-Bu Tan was also SambaNova’s executive chairman. But news emerged recently that Intel was planning to step up the relationship it had established previously with SambaNova, including a new $15 million investment. That news was oddly inspiring to investors, who sent shares surging up nearly 4% in Thursday afternoon’s trading.
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Intel’s plan to put another $15 million into SambaNova would mean that Intel would own 9% of the operation, reports noted. The investment is, of course, subject to regulatory approval. Intel also piled into several other companies, putting investment behind OPAQUE Systems, EPIC Microsystems, and 3D Glass Solutions, reports noted. The report also suggested that each of these companies also had connection to Lip-Bu Tan.
But for those concerned about all these connections, the report noted that Intel has the matter in hand. Intel noted that it “…maintains rigorous, well-established governance and conflict-of-interest policies, with active Board oversight to ensure all decisions are made in the best interests of the company and its shareholders.” This might not sound particularly comforting, but based on the surges seen in the last two days, it must be comforting to a majority of shareholders.
Worth Reconsidering
Meanwhile, word from D.A. Davidson analyst Gil Luria—who has a four-star rating on TipRanks—made it clear that Intel was worth a second look. Luria maintained his rating of Hold, and kept a $45 per share price target in place. The biggest reason for Luria’s assessment seems connected to the recent move to buy back its portion of an Irish fabrication center for $3 billion more than it sold it for in 2024.
Luria noted, “Intel and Apollo Global Management announced a definitive agreement in which Intel will repurchase the 49% equity interest in the JV related to Fab 34 in Ireland for $14.2 billion. The transaction effectively unwinds the 2024 agreement where Apollo acquired the 49% stake for $11.2 billion. We believe the announcement bodes well for the INTC turnaround story while significantly strengthening the balance sheet.”
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on seven Buys, 22 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 114.13% rally in its share price over the past year, the average INTC price target of $47.97 per share implies 3.6% downside risk.
