Shares of Intel (INTC) rose more than 9% on Wednesday after the company said it is buying back an equity stake in one of its chip plants in Ireland from Apollo (APO).
The news is a good sign that Intel, which continues its turnaround efforts, is getting on a more stable financial footing.
The chipmaker will buy back the 49% stake in the manufacturing facilities it sold to Apollo for $11.2 billion in 2024 for $14.2 billion, the company said in a statement.
Apollo is the parent company of Yahoo Finance.
“Our 2024 agreement was the right structure at the right time and provided Intel with significant flexibility, allowing us to accelerate critical initiatives,” said Intel Chief Financial Officer David Zinsner.
“Today we have a stronger balance sheet, improved financial discipline and an evolved business strategy. We appreciate Apollo’s continued collaboration in achieving this result while realigning our capital structure with our long-term strategy.”
Former Intel CEO Pat Geldinger sold his stake in the Irish facility at a time when the company needed to shore up its finances as it sought to regain a leading position in chip development and manufacturing technologies that it ceded to rivals AMD (AMD) and TSMC (TSM).
Intel’s revenue declined 20% year over year in 2022, 14% in 2023, another 2% in 2024, and 0.47% last year.
Intel has largely missed the AI ​​explosion that has catapulted Nvidia (NVDA) to become the largest publicly traded company on the planet due to its lack of significant graphics chip technology.
But the tide appears to be turning in Intel’s direction. As agent AI, AI robots that can perform tasks on behalf of a user, gains momentum, central processing units (CPUs) are becoming increasingly important to data center builders and hyperscalers.
Intel also successfully launched its long-delayed 18A chip technology, which promises similar performance and battery life to Apple’s Arm-based M-series chips.
I used an 18A-based chip, called Core Ultra Series 3, and found it to be as capable as Apple’s processors.
Intel has also received significant backing from both the Trump administration, which bought a 10% stake in the company in August, and Nvidia, which bought $5 billion worth of company stock in September.
The move to CPUs in AI data centers and Intel’s improved chip technology could finally help the company return to growth, with investors expecting revenue to rise 2% year-over-year by the end of 2026.
But AMD chips are also in high demand in the data center for agent AI workloads. And Nvidia has begun deploying its own CPU servers to power AI services. Arm, which traditionally licenses chip designs to companies like Apple and Nvidia, is even getting in on the action with its first production CPU.