A "breakthrough" that could strengthen Intel's position as a key chip maker in the U.S., or a "goodwill gesture" and a political move by Apple to curry favor with the authorities? Wall Street analysts are divided on Apple's potential deal at Intel. On Wednesday, September 24, Bloomberg sources reported that Intel has approached the iPhone maker with an investment proposal, but talks are at an early stage and may not result in a deal.

Intel shares jumped nearly 6% in Thursday trading, while Apple shares added about 0.5%.

What the analysts are saying

- Attracting Apple's investment could cement Intel as a key chipmaker in the US in the future after the company has already secured the support of the US government and Nvidia, according to DA Davidson analyst Gil Luria. Before the authorities' intervention, Intel had no "anchor" customers for the upcoming 14A processor, putting the company's prospects in doubt, he said. "Now Intel has Nvidia, and if Apple is added, it will have two of the largest semiconductor customers supporting U.S. capacity," Luria emphasized in a note cited by MarketWatch.

- Brian Mulberry, senior portfolio manager at Zacks Investment, is not so positive. He admitted that the possible partnership could be a gesture of "goodwill" and noted that he himself is still skeptical about the prospect. Mulberry recalled that Intel and Apple have partnered before, before Apple started making its own chips in 2020. "Where I have my doubts is that Intel was once already unable to keep up with the needs of Apple PCs," the analyst emphasized. He added that Apple, however, could benefit from this collaboration by moving some production to the US to avoid duties.

- "Bringing in Apple as an investor and possibly a major customer would be a significant breakthrough," Gabelli Funds portfolio manager Hendy Sussanto told MarketWatch. He believes it would be critical for Intel to secure customers and project commitments for 14A "not only to prove its ability to move on the tech plan, but also to attract large customers for the foundry business and build the scale of production necessary to achieve economic viability."

- According to Ryuta Makino, another analyst at Gabelli Funds, Apple may be interested specifically in Intel's foundry business, i.e. in production capacity for chip production, but not in the chipmaker's own processors on the x86 architecture. "This move can be seen as political: Apple is making a serious bet on investing in US manufacturing," Makino emphasized. Like his Zachs colleague, he believes it is "a way for the iPhone maker to win additional government approval."

- Seaport Research analyst Jay Goldberg, although upgrading Intel's stock from sell to neutral, also cautioned against being overly optimistic, Barron's reports. "We believe Intel is on the wrong track and has less and less time to save its [semiconductor] fabs. Nevertheless, [the company's] near-term stock performance will likely be driven by new investments and temporary solutions for the fabs," he said in the note. According to Goldberg, the easiest way out for Intel would be to sell or shut down production rather than try to compete with industry leader TSMC. While the company may try to garner support from bigtechs like Apple, it still lacks a coherent AI strategy, margin problems and limited cash flow risks remain, the analyst emphasized. "These weaknesses will become clearer over time, but in the near term they are likely to be overshadowed by the arrival of new outside investors," he added.

This article was AI-translated and verified by a human editor

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