Intel Drops Its Arm Investment, Even as Arm Sails to New Heights
A near-doubling of value since its relisting on the stock market has Intel cashing out its Arm investment — amidst heavy layoffs.
Chip-making giant Intel has sold its stake in Arm, worth around $147 million, as it seeks to shore up its own holdings amidst hardware flaws and ongoing layoffs.
In the company's latest 13F filing with the US Securities and Exchange Commission (SEC), a quarterly report mandated by investment managers with portfolios larger than $100 million, Intel confirmed that it held no positions in Arm Holdings — the company behind the Arm architecture, which powers a range of rival processor designs, including those in most smartphones and tablets and in Apple's whole product range.
That's a dramatic shift in position for Intel, which had previously owned around 1.8 million Arm shares — equivalent to around $147 million, based on share price as of the end of the last financial quarter — and comes at a time when Intel, a pioneer in microprocessors, is struggling, seeing a sliding share price amidst design flaws in its latest-generation processors, launch delays, and massive layoffs amounting to more than 15 per cent of its staff in its most recent cuts.
Recent product launches and announcements have seen Intel pushing its vision of "the age of the AI [Artificial Intelligence] PC," but the company has been losing ground to rivals AMD and NVIDIA at the high-performance end and Arm licensees like Qualcomm at the portable end of the market in a double-whammy that is making it challenging for Intel to capitalize on the current AI craze.
Arm, by contrast, is on the up, having seen its share price near-double since it re-entered the stock market with an initial public offering on the NASDAQ market originally announced in August last year. Arm's success is buoyed, too, by that of its licensees — and those in which it invests directly, including single-board computer maker Raspberry Pi, which counts Arm among those who invested in a London Stock Exchange flotation that brought in $211.5 million back in June.
Intel has not commented on the reason for the sale, but it does not appear to have had the impact it had hoped: the company's share price sank two per cent on the news, bringing the value down to less than half of what it was at the start of the calendar year.