Intel stock rallied Tuesday after the company announced that SoftBank is making a $2 billion investment in the struggling chipmaker.
Intel jumped more than 6% in early trades, after rising sharply late Monday when the Silicon Valley company said SoftBank will pay $23 per share of Intel common stock.
The Silicon Valley powerhouse said SoftBank will pay $23 per share of Intel common stock.
"We are very pleased to deepen our relationship with SoftBank, a company that's at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership," Intel Chief Executive Lip-Bu Tan said in a statement.
Referring to SoftBank CEO Masayoshi Son, Tan added, "Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment."
Son in a statement called semiconductors "the foundation of every industry."
"This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role," he said.
Patrick Moorhead, chief analyst at Moor Insights Strategy, said the SoftBank investment could create "interesting scenarios."
"This is very good news for Intel, any way you slice it," he wrote in a LinkedIn post. "At the very minimum, SoftBank believes that Intel will be worth a lot more in the future, possibly by its own commitments."
Intel Stock: What It Means For Investors
The announcement underscores a period of uncertainty for Intel stock. Intel's Relative Strength Rating has jumped to 72 from 25 last week, according to IBD MarketSurge.
The SoftBank news follows reports that the Trump administration was considering acquiring a stake in Intel. Bloomberg reported Monday that the government was in talks to buy a 10% stake by converting some or all of the grants Intel received through the U.S. Chips and Science Act into equity.
The news prompted Bernstein analyst Stacy Rasgon to quip: "No more money for nothing, cause the CHIPS ain't free."
"Would Intel get anything else besides money in return for equity?" he said in a client note. "Besides money, Intel needs customers. Is it conceivable that as part of something like this the administration might 'encourage' customers to use Intel's capacity (either directly, or indirectly through tariff policy or other regulation)?"
