It is an all-hands-on-deck type of situation at Intel, where the former behemoth of the semiconductor sphere is now trying to conserve cash by slashing dividends and payrolls, and attempting to raise additional funding by culling extraneous investments. A case in point: Intel has now sold all of its stake in Arm Holdings.
As we've noted in a number of recent posts, Intel is traversing a multidecadal nadir at the moment, having failed to meet the consensus expectations of analysts for its top-line and bottom-line metrics in Q2 2024, and compounding this failure by posting underwhelming results for the key DCAI segment, which indicates that it has yet to truly tap into the secular AI-focused tailwind.
Critically, Intel missed its own guidance for the just-concluded quarter's gross margin by a wide shot and guided to further sequential weakness ahead.
To conserve cash, the company has cut its dividend and announced another mass layoff plan, to the tune of 15,000 employees, or 13.6 percent of its current workforce of around 110,000. This follows the 5 percent layoff that the company implemented just last year.
This brings us to the crux of the matter. Intel has now filed a Form 13-F with the SEC, indicating that it has disposed of the entirety of its Arm Holdings stake, which comprised of 1.18 million shares as of Q1 2024.
Interestingly, the chip manufacturer still retains a stake in Astera Labs (NASDAQ: ALAB), Joby Aviation (NYSE: JOBY), MariaDB (NYSE: MRDB), and Senti Biosciences (NASDAQ: SNTI).
Bear in mind that Intel has recognized a cumulative loss of $120 million on its equity investments in Q2 2024. This line item on the income statement includes both realized and unrealized gains/losses (arising from changes in the fair value of investments).
Meanwhile, as we reported earlier today, Bernstein analysts believe that the CPU channel for desktops and notebooks appears to be ridding itself of the elevated inventory levels that have plagued the demand paradigm over the past few quarters.
This pick up in demand should help Intel going forward. Remember that around $1.3 billion of Intel's Q2 revenue can be classified as incentivized sales. Bernstein analysts note:
"Intel has been pulling forward sales for quite a few quarters, with recent "incentivized sales" levels approaching the elevated levels we saw exiting 2022, and hence are paying for it now."
Intel shares closed today with a healthy ~6 percent gain. However, over the past month, the stock is still down a whopping 40 percent.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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