Intel Stock: Rebounds On TSMC JV Buzz - But Is It Enough To Reverse The Slide?

Intel Corp INTC investors finally got a reason to smile, if only briefly. The stock jumped 5.36% in early trading on reports that Taiwan Semiconductor Manufacturing Company TSM is pitching a joint venture to Nvidia Corp NVDA, Advanced Micro Devices Inc AMD, Broadcom Inc AVGO and Qualcomm Inc QCOM to take over Intel's struggling foundry business.

While the news offers a potential lifeline, Intel's long-term troubles suggest this may be more of a short-term boost than a full-fledged turnaround.

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Intel Stock In Deep Trouble

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Despite today's pop, Intel stock remains in a steep downtrend. The stock has cratered nearly 54% over the past year and is down over 7% in the past month. From a technical standpoint, the picture remains overwhelmingly bearish. Intel stock, at $20.76, sits well below key moving averages:

• The eight-day simple moving average (SMA) at $20.84 suggests bearish momentum.
• The 20-day SMA at $22.93 confirms Intel's struggles to gain traction.
• The 50-day SMA at $21.21 and 200-day SMA at $24.03 both reinforce the bearish outlook.

The moving average convergence divergence (MACD) indicator at a negative 0.36 also suggests continued weakness, while the relative strength index (RSI) at 44.74 indicates that Intel stock is approaching oversold territory but hasn’t signaled a reversal yet.

TSMC's Proposal: A Game-Changer Or Just Noise?

Reports indicate that TSMC is leading discussions for a joint venture to manage Intel's foundry division, which customizes chips for clients. This move aligns with past efforts by the Donald Trump administration to support Intel, ensuring a U.S.-based semiconductor powerhouse remains competitive.

Any agreement would require government approval and TSMC would be limited to a minority stake to avoid regulatory concerns.

With Intel posting a staggering $18.8 billion net loss in 2024, investors are looking for a catalyst.

While today's rally suggests traders are optimistic about the JV talks, Intel's downtrend remains firmly intact. Without a concrete turnaround plan, this pop may be short-lived.

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