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📉 “Intel Shares Slide as Company Decides to Keep Its Networking Unit” 🚨🚨🚨

Intel stock fell sharply Thursday after the company announced it will retain full ownership of its networking business, a decision that disappointed investors hoping for a cash-generating asset sale amid the chipmaker’s demanding turnaround plan.

Shares of Intel (INTC) dropped more than 4.5% in early trading following the update on its networking division, known as NEX.

Inside Intel’s NEX Unit

NEX plays a major role in Intel’s data infrastructure ecosystem:

• It builds infrastructure processors that handle essential “housekeeping” operations — like security checks — which free up Intel’s main CPUs to focus on higher-value computing tasks.

• The unit also produces data switches and controllers, key components that manage and direct information as it flows to CPUs.

While strategically important, the unit is not among Intel’s highest-margin businesses, leading analysts to speculate for months that the company might divest part or all of it.

A Missed Cash Opportunity?

Investors had widely expected Intel to sell NEX or a stake in it, which could’ve infused fresh capital into CEO Lip-Bu Tan’s ambitious — and expensive — multiyear turnaround strategy.

The disappointment stems from precedent:

• Back in September, Intel sold 51% of its Altera unit to private equity firm Silver Lake for $3.3 billion, a move that was praised as smart financial management during a challenging transition.

A similar sale of NEX could have:

• Boosted liquidity

• Lightened operational load

• Given Intel more room to invest aggressively in its foundry expansion and advanced-chip initiatives

By choosing to retain NEX, Intel is signaling long-term strategic value — but at the cost of a short-term market reaction.

Market Reaction

With investor expectations reset, Intel’s stock pulled back as Wall Street weighed the implications of:

• Retaining a lower-growth segment

• The absence of an anticipated cash infusion

• Potential delays or added pressure on Intel’s broader restructuring plans

Intel is keeping its networking unit, betting that NEX will play a critical role in its long-term ecosystem strategy. But in the near term, the decision struck investors as a missed opportunity — and the sell-off reflects that frustration.