Nvidia considering outbidding Qualcomm to acquire Intel at a 50% premium

From Nasdaq.: 2024-09-25 02:56:29

Qualcomm is eyeing a potential takeover of Intel, but Nvidia could be a better fit with the ability to pay 50% more. Intel’s stock has fallen significantly this year, but the company shows signs of recovery with promising upcoming products. Nvidia could leverage Intel’s assets for growth in key markets.

Intel’s stock performance has been volatile, with annual returns fluctuating wildly. A potential Qualcomm deal may not offer Intel shareholders much upside, but a Nvidia acquisition could bring deeper pockets and resources to drive Intel’s transformation. Nvidia’s AI technology expertise could boost Intel’s revenues significantly in the coming years.

Nvidia could benefit from Intel’s foundries to produce cutting-edge GPU designs. Intel, with its advanced manufacturing technology, could lower production costs and secure supply chain stability for Nvidia. Even without acquiring Intel, Nvidia could leverage its foundry services, but an outright acquisition at current valuations may make more sense.

Intel has lost market share to AMD in the PC and server markets. By teaming up with Nvidia, Intel could potentially boost revenues with AI technology and cost savings. Assuming operating margin improvements and cost efficiencies, an Nvidia-Intel deal could create significant additional profit and value, with Intel shareholders possibly seeing a premium of 50%.

Investors are cautious about the U.S. economy’s trajectory, with concerns about a potential recession. A look at historical market crashes shows how key stocks fared during and after such events. Intel’s recent returns have been negative, but a well-executed strategy could potentially lead to significant stock upside.

The author’s opinions do not necessarily reflect those of Nasdaq, Inc.



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