Mobileye Shares Surge After Intel Confirms No Plans to Sell Stake
Mobileye Shares Surge in pre-market trading on Thursday after Intel (NASDAQ: INTC), the company’s majority shareholder, announced it has no plans to divest its stake in the autonomous driving firm.
Previous Speculation on Intel’s Stake in Mobileye
Earlier reports from Bloomberg News suggested that Intel was considering its options regarding Mobileye as part of a broader strategy shift. According to sources, the chipmaker was exploring selling part of its 88% holding in Mobileye, either through public markets or to a third party.
Mobileye Faces Challenges Amid Industry Slowdown
Mobileye, which develops software and hardware for self-driving vehicles, has been facing headwinds. A post-pandemic supply glut has led to reduced production by automakers, impacting Mobileye’s financial performance. In August, the company lowered its financial forecasts and is currently heading for its third consecutive annual loss.
Intel Reaffirms Commitment to Mobileye
In response to the speculation, Intel released a statement reaffirming its commitment to Mobileye. The company emphasized its “unwavering focus on value creation” and expressed excitement about Mobileye’s future.
Intel highlighted Mobileye’s unique position as a leader in developing and deploying advanced driver assistance systems (ADAS). These systems are crucial in the growing autonomous vehicle market, which is expected to see significant expansion in the coming years.
Intel’s Broader Strategy: Cost-Cutting and New Partnerships
This update comes as Intel continues to adjust its overall strategy. The company recently announced a temporary halt in construction of new plants in Germany and Poland as part of a $10 billion cost-cutting plan. This strategy has included a reduction in capital expenditures and a 15% cut to the company’s workforce, impacting more than 15,000 employees.
Despite these cuts, Intel recently unveiled a partnership with Amazon (NASDAQ: AMZN) through its chip production service. Additionally, Intel secured up to $3 billion in investment from the Biden administration to produce advanced semiconductors for the US military.