Intel Sells Arm Shares and Lowers Holdings in Multiple Companies

In the second quarter, Intel made significant moves to reorganize its finances by offloading its stake in Arm Holdings, which brought in around $147 million. This decision wasn’t made lightly; it’s part of a broader strategy to juggle costs and guide the company through a period marked by financial turbulence. Besides Arm, Intel also sold its interest in the cybersecurity firm ZeroFox and trimmed down its holdings in Astera Labs, all in a determined bid to balance the books.

Documents from a recent SEC filing reveal that Intel parted with its entire ownership of 1.18 million shares in Arm Holdings. Even though this sale brought in a hefty sum of $147 million, the figures aren’t all rosy. Intel ended up recording a $120 million net loss on its equity investments for the quarter. This loss contributes to a larger financial downturn totaling $1.6 billion that Intel faced over this period.

The divestment from Arm is complemented by Intel’s withdrawal from ZeroFox and scaling back on Astera Labs, which develops enterprise hardware connectivity platforms. These decisions reflect the company’s strategic maneuvers to trim excess and stabilize amid ongoing market adversities.

Despite stepping away from Arm, it’s apparent that Intel’s initial investment was strategically motivated. Arm Holdings plays a crucial role in the semiconductor space, with its designs being a backbone for most mobile devices—an area Intel no doubt had vested interests in exploring further. Their collaboration extends into data centers, with both parties working on platforms that utilize Intel’s 18A process technology. Arm also likely sees value in Intel as a potential major licensee for its technologies, benefiting other companies involved with Arm designs.

Astera Labs drew Intel’s attention due to its innovative products, essential for data centers—one of Intel’s key markets. By investing in Astera, Intel aimed to ensure a reliable supply of smart retimers, smart cable modems, and CXL memory controllers, aligning with its objective to dominate the datacenter CPU market.

Earlier this month, Intel’s financial predicament was brought into sharp focus with a lackluster earnings report that sent its stock plummeting by 33%, wiping out billions in capitalization. In response, Intel announced its plan to lay off 15,000 employees and slash expenses. They have even halted dividend payouts—a clear sign of the serious steps they’re taking to conserve resources and prioritize recovery. Letting go of Arm stock marks a crucial step in immediate financial stabilization, a necessary move given the circumstances.