Intel starts week as top gainer in Dow Jones on talk of $5 billion Apollo investment

• Over the weekend, Apollo Global Management was said to offer $5 billion investment.
• INTC stock rose 3.3% on Monday, leading DJIA.
• Qualcomm was said to be interested in buyout last Friday.
• Analysts say regulatory hurdles too vast for acquisition.

Intel (INTC) stock was the best performer in the Dow Jones Industrial Average (DJIA) on Monday, besting the likes of Visa (V), Walmart (WMT) and Boeing (BA). Shares of the struggling semiconductor closed up 3.3% on the day as Apollo Global Management was in discussions to invest $5 billion.

The Dow Jones ended the day up 0.15%, relatively in line with the NASDAQ but behind the S&P 500.

Intel stock news

The up to $5 billion offer from Apollo, a large alternative asset manager, was being considered by Intel management, according to a Bloomberg story from Sunday.

The news comes after a late-breaking story last Friday about Qualcomm’s (QCOM) possible interest in acquiring Intel outright. It would be a massive M&A story. Despite collapsing in value by more than half year to date, Intel still has a $90 billion market cap. Qualcomm is worth a little less than $200 billion. 

The combination would instantly produce the largest semi company on earth, but Stifel analyst Ruben Roy was quick to throw cold water on that deal. 

“Similar to other proposed mega-deals that were unable to clear high regulatory hurdles, such as Nvidia’s (NVDA) bid to acquire ARM Holdings (ARM), Broadcom’s (AVGO) proposal to acquire Qualcomm and Qualcomm’s attempt to acquire NXP Semiconductors (NXPI), we believe that a Qualcomm/INTC deal would be unlikely to garner regulatory approval,” wrote Roy.

Broadcom was also looking into a deal for Intel, but insiders on Saturday said they had decided against proposing any acquisition.

Raymond James was also pessimistic about Qualcomm getting approvals: “The speculated QCOM+Intel deal is unlikely to receive China regulatory approval in our view, given the recent M&A experience in the industry,” wrote analyst Srini Pajjuri on Friday.

Intel had earlier been considering simply selling off its Altera unit, which makes programmable chips. Some analysts think it could fetch $22 billion alone in the capital markets. Others think the products division could be valued at $140 billion itself.

Intel stock forecast

Despite the Moving Average Convergence Divergence (MACD) indicator showing positive movement of late, INTC shares have yet to achieve any real gains. Intel stock needs to recover the $24.90 former support in order to get more bulls interested.

The some of Intel’s parts are worth much more than it is as a single entity with a poor balance sheet. But even still, you’d think all the acquisition talk would garner a bigger rally. If the talk grows more serious, than Intel shares should move back to the $30 range.

INTC daily stock chart