Intel (NASDAQ:INTC) could be in advanced discussions with Apollo Global Management (NYSE:APO), where Apollo would supply the chip giant with more than $11 billion to help it build a plant in Ireland, according to an exclusive Wall Street Journal report.
The report stated that other firms in the running included KKR (NYSE:KKR) and infrastructure investor Stonepeak. Apollo’s High-Grade Capital Solution business, which usually provides financing to large investment-grade companies, is reportedly leading the deal for the asset management firm.
Intel’s Need for Chip Factory Funding
Under CEO Pat Gelsinger, Intel is expanding factories in Arizona, Ohio, Ireland, and other locations to meet high chip demand and support its contract chip-making business, which aims to compete with industry giants like TSMC (NYSE:TSM).
However, building a chip factory is an expensive proposition and can cost up to $20 billion. Intel’s ability to fund these projects has been hampered by cash flow challenges stemming from declining sales of chips in personal computers and servers.
Is Intel a Buy, Hold, or Sell?
Analysts remain sidelined about INTC stock, with a Hold consensus rating based on four Buys, 23 Holds, and four Sells. Year-to-date, INTC has declined by more than 35%, and the average INTC price target of $39.15 implies an upside potential of 28.2% from current levels.
