Intel's shares rose 4% Tuesday after the company announced plans to take its self-driving car unit public in 2022, at a potential $50 billion valuation.
Intel shares rose more than 4% on the news.
Krisztian Bocsi is a correspondent for the news agency.
The Wall Street Journal reported that the tech giant said it would take its self-driving car firm, Mobileye, public next year at a potential valuation of more than $50 billion.
The value of self-driving car companies has skyrocketed in recent years, despite Intel's acquisition of 100% of the Israeli company.
The chipmaker intends to maintain majority ownership in Mobileye following an initial public offering, with the two companies also continuing as strategic partners, according to a company press release Monday.
The stock of Intel jumped as much as 8% on the news before paring back gains somewhat, with the stock currently up 4%.
Pat Gelsinger, who took over the top job at Intel in February, said in a statement that Mobileye's annual revenue is expected to grow more than 40% in 2021.
Gelsinger has been trying to turn the company around and expand into new markets, as investors have grown frustrated with Intel's lackluster performance.
"Intel's acquisition of Mobileye has been a great success," said Gelsinger. Mobileye has a track record for innovation and unlock value for shareholders, and an IPO is the best opportunity to build on that.
Surprising fact.
When compared to other chipmakers, Intel's stock is up less than 2% so far this year, but it is up more than 140% this year.
CFRA analyst Angelo Zino thinks the move makes sense as it increases focus on Intel's core business and raises capital. He argues that the move will allow shareholder value to be unlocked. Despite the near-term catalyst, we are hard-pressed to get enthusiastic on the Intel story given ongoing share loss, margin compression, uncertain PC landscape and high capex spend needs.
