You have to give chip stock Intel (INTC) credit for its sheer focus. It is paring back virtually everything that is not chips or chip manufacture. In fact, it recently announced that it was spinning off its networking and edge computing group, making it a stand-alone company. The move left Intel investors a bit shaken, and shares edged up fractionally in Monday afternoon’s trading.
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The Network and Edge Group, as it is known, will be spun off into an entity that is “…focused exclusively on delivering leading silicon solutions for critical communications, enterprise networking and ethernet connectivity infrastructure.” A report from CRN.com noted Intel is already on the hunt for outside investors in that unit. Intel plans to remain “an anchor investor” in the new entity, which will allow it to benefit from gains in the market without having to take on its costs as well.
There is no timeline as yet for when the division will be spun off, however, which means we could see this development take shape at any time. Given that Intel is just now looking for outside investors, though, that suggests that the process may take longer than expected. We will likely hear more about this development through the rest of 2025 and possibly into 2026.
Oh, and More Job Cuts. Lots of Them.
As if that were not enough, Intel’s ongoing quest to slim down is about to get even harsher than it was previously. New reports note that Intel plans to cut around 25,000 jobs by the end of the year, which represents about 15% of Intel’s total workforce. Intel confirmed as much during its second quarter earnings report.
In addition, new CEO Lip-Bu Tan also joined the growing throng of businesses demanding employees come back to work in the office. The return-to-office (RTO) mandate is set to take hold “by September,” reports noted. Further, Intel will also pare back its investment in factories worldwide. Tan made Intel’s stance abundantly clear, noting, “There are no more blank checks. Every investment must make economic sense.”
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 25 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 32.86% loss in its share price over the past year, the average INTC price target of $22.25 per share implies 7.28% upside potential.
