Intel Stock: Rebounds On TSMC JV Buzz - But Is It Enough To Reverse The Slide?

Intel Corp (NASDAQ: INTC) investors have a brief moment of optimism as the stock saw a 5.36% increase in early trading. This uptick comes in response to news that Taiwan Semiconductor Manufacturing Company (TSMC) is discussing a possible joint venture to assist Intel in reviving its struggling foundry business. TSMC's proposal involves collaborating with major players like Nvidia Corp (NVDA), Advanced Micro Devices Inc (AMD), Broadcom Inc (AVGO), and Qualcomm Inc (QCOM).

While this news provides a glimmer of hope for Intel, the company's ongoing challenges imply that this may only be a temporary boost rather than a substantial recovery.

Intel's Ongoing Challenges

Even with today's rebound, Intel's stock remains trapped in a significant downtrend. Over the past year, the stock has plummeted nearly 54% and has declined more than 7% just in the last month. Analyzing technical indicators presents a discouraging picture. The shares are currently priced at $20.76, significantly below key moving averages that indicate bearish momentum:

• The eight-day simple moving average (SMA) stands at $20.84, reflecting negative momentum.
• The 20-day SMA is at $22.93, underscoring Intel's struggle to gain traction.
• The 50-day SMA is at $21.21, while the 200-day SMA is at $24.03, both reinforcing the bearish outlook.

Additionally, the moving average convergence divergence (MACD) indicator shows a negative value of 0.36, which also suggests ongoing weakness in the stock. The relative strength index (RSI) is at 44.74, indicating that the stock is nearing oversold territory, yet it hasn't indicated any signs of a reversal.

Is TSMC's Joint Venture the Solution?

There are reports suggesting that TSMC is leading discussions regarding a joint venture aimed at managing Intel's foundry segment, which focuses on manufacturing chips for various clients. This proposal aligns with previous government efforts to back Intel, ensuring that a U.S.-based semiconductor manufacturer remains competitive against global rivals.

However, any potential agreement would need government approval, and TSMC would be restricted to holding a minority stake to mitigate regulatory issues.

With Intel facing a staggering $18.8 billion net loss in 2024, investors are on the lookout for catalysts that could steer the company toward recovery. Although today’s rally hints at market optimism regarding the joint venture discussions, Intel’s broader downtrend remains firmly in place, and absent a solid turnaround strategy, this recent surge might prove to be fleeting.

Intel, TSMC, Stock