Intel shares climb after reports Qualcomm approached Intel about a takeover

Well, Intel shares getting a pop on a report that chip giant Qualcomm approached its rival about a takeover, perhaps in recent days. Joining us now, Patrick Moorhead of Moor Insights and Strategy. Pat, we're just on the phone about this. You know, you're the first guy I called to see what you think. I mean, maybe a deal could get done here, but Intel is such a big domestic manufacturer, particularly of chips right now. It's not like just anybody would be allowed to come in and buy it. Yeah, John, there's so many ways to look at this in the last 30 minutes, right? You have to ask, you know, so first of all, why does this come out now? When you have board of directors, investors, you get churn like this. You get strategic options on the table. And then you have to say, hey, is it real or fake? Is it, you know, created to just disrupt Intel? What's the synergy between the companies? What would the regulators say? And would it be a full sale or would it be carve it up? I'm not going to scenario plan it right now, but when you lay up Intel next to Qualcomm, right? You've got Intel that's big in data centers, PCs, big fab manufacturing capabilities, small in auto, no smartphones, and relatively large in what I'll call the industrial edge. You've got Qualcomm big in smartphones, big in connectivity, IP, big in auto, no foundry. They're paying TSMC all the margin to make it small in data center, smaller in industrial edge. So I see synergies in this. When you look at the whole, the two companies completely coming together. How about motive, though? I did reach out to Qualcomm, by the way, folks, Qualcomm said no comment. It doesn't make sense potentially for Qualcomm to buy Intel, even if it doesn't want every single piece. Intel itself doesn't seem to need every single piece right now. Is there a way that that pencils out? I think it does. I mean, if you look at Qualcomm's desire to get in the data center, right now they have about 1% in PC market share and Intel has closer to 80%. But if you look at what could happen with the foundry, John, and if Qualcomm had access to a foundry and it was the combined entities actually generated and saw that profit in 26 or 27, it would put Qualcomm in a tremendously advantaged position just in their own markets that they're in right now. So, Patrick, Intel was actually a big winner this week. It goes up 11% on the week and obviously finished higher into the close here on these reports. It's still down 56% since the start of the year. And we actually started the week on overtime with Pat Gelsinger from Intel coming on this show to outline the plans he had for standing up this internal subsidiary for the foundry business. The fact that the board still had a lot of confidence in him, curtailing some of the build out that was expected in Europe on down the road. What do you think came first? That announcement and those plans or the fact that the stock just can't seem to get out of its own way and thus looks like an attractive takeover target now? I think this all came out in parallel. And I don't think Qualcomm would be waiting for a market reaction. I don't think there are anybody who looked at what Intel brought out wouldn't think that it would increase the stock 50%. Investors really are only looking 18 months out. And the data center is not going to look fundamentally different. But what I do think, though, is if this is real, Qualcomm sees the opportunity likely as talking to some disgruntled investors, potentially even aligning itself with ex-board member Lipu Tan, who exited Intel board a short while ago. But when you have opportunities like this, Morgan, you just have to go for it. And how many years would you have to wait for something like this? I mean, you had to wait decades for something like this and have the position for it to work potentially.