Intel Divests Arm Shares and Lowers Stakes in Various Companies

During the second quarter, Intel decided to cash out its entire investment in Arm Holdings, pulling in about $147 million. This move was part of a broader strategy to tighten financial belts and bolster cash reserves as the company grapples with some hefty monetary challenges. Alongside Arm, Intel also parted ways with its shares in cybersecurity firm ZeroFox, and scaled back its interests in Astera Labs.

According to a recent SEC filing, Intel unloaded 1.18 million shares of Arm Holdings. However, despite pocketing $147 million from the sale, the company still posted a $120 million net loss on its equity investments for the quarter. This loss is part of a wider $1.6 billion setback that Intel reported for the period.

Besides Arm, Intel also pulled out of ZeroFox and dialed down its stake in Astera Labs, known for its work on enterprise connectivity solutions. These decisions align with Intel’s ongoing initiatives to trim costs and regain financial footing while navigating through persistent market hurdles.

Even though Intel has stepped away from Arm, it’s likely that its earlier investment was driven by strategic long-term goals. Arm Holdings is a heavyweight in the semiconductor arena, with its designs powering a vast array of mobile gadgets. Understandably, Intel had a keen interest in being part of that conversation. Notably, Intel and Arm have been teaming up on datacenter solutions designed for Intel’s 18A process technology. Additionally, there’s a possibility that Arm sees Intel as a future licensee and a potential ally for other companies that leverage Arm’s designs.

As for Astera Labs, Intel’s interest was presumably rooted in a desire to ensure a reliable flow of crucial components like smart retimers and CXL memory controllers, essential for datacenter operations—a sector where Intel aims to maximize CPU sales.

Earlier this month, Intel’s financial woes became more pronounced when the company announced disappointing earnings, which led to a steep 33% tumble in its stock value, wiping out billions in market capitalization. To address these issues, Intel laid out plans to cut 15,000 jobs and find other avenues to slash expenses. The company has also halted its dividend payouts, a clear sign that it is deeply committed to conserving cash and steering towards recovery. Dealing with the Arm shares appears to have been a necessary step towards immediate financial stabilization, pushing Intel to make that tough decision.