Intel Partners with Japan to Develop Quantum Computer, Shares Rise Amid Job Cuts

Intel (NASDAQ: INTC) has made a major announcement, forming a strategic partnership with Japan’s National Institute of Advanced Industrial Science and Technology (AIST) to develop next-generation quantum computing technology. This collaboration is seen as a significant step forward for Intel in the quantum computing space, which promises to revolutionize industries with its computational power. Intel’s stock rose nearly 2% on the news, providing a rare boost amidst the company’s ongoing challenges.

Intel’s Quantum Computing Breakthrough

The partnership between Intel and AIST aims to create a quantum computer capable of delivering tens of thousands of qubits, a major leap from the current 100 qubits in available systems. This advanced quantum system will not only enhance computational performance but also enable the handling of far more complex computational tasks. Quantum computing holds the potential to solve problems beyond the capability of traditional computers, including breakthroughs in fields like medicine, materials science, and cryptography.

Intel’s processors will be at the heart of this cutting-edge system, and the quantum computer is expected to be accessible to universities and private companies willing to pay for usage. This project, scheduled to begin in spring 2025, promises to establish Intel as a significant player in the quantum computing race, placing the company at the forefront of a rapidly evolving field.

Intel Faces Job Cuts Amid Quantum Push

While the quantum computing project provides a bright spot for Intel, the company is also going through a period of corporate restructuring. Reports indicate that Intel will be cutting 58 jobs at its Folsom facility, bringing the total number of job losses at the site to 1,117 since January 2023. These layoffs, set to begin on March 31, 2025, are part of a broader trend of job reductions within Intel, which has seen about 23,000 jobs cut across the company in the past two years, a 17% reduction in its overall workforce.

The company’s decision to sell the Folsom facility but lease part of the space for continued operations highlights Intel’s ongoing efforts to streamline operations and reduce costs in an increasingly competitive market.

Intel’s Stock Outlook: Hold Rating Amid Challenges

Despite these mixed developments, Intel’s stock has been under pressure, with shares falling 53.61% over the past year. Wall Street analysts have issued a Hold consensus on Intel stock, with one Buy, 25 Holds, and four Sells in the past three months. While there is optimism surrounding Intel’s entry into the quantum computing space, analysts remain cautious about the company’s near-term prospects.

The stock’s average price target is $22.02 per share, indicating a 12.09% upside from its current levels. This moderate upside suggests that investors are cautiously optimistic about Intel’s long-term prospects but remain wary of the broader challenges facing the company, including its ongoing restructuring and competitive pressures in the semiconductor space.

Key Insights

• Quantum Computing Partnership: Intel and AIST aim to develop a quantum computer with “tens of thousands of qubits,” positioning Intel as a leader in quantum technology.
• Job Cuts: Intel is cutting 58 jobs at its Folsom facility, part of a broader trend of 23,000 job cuts across the company over the past two years.
• Stock Performance: Despite the quantum computing partnership, Intel’s stock has fallen 53.61% over the past year, with a Hold consensus rating and a 12.09% upside from current levels.
• Workforce Reduction: Intel’s 17% workforce reduction is part of its ongoing restructuring efforts, which have raised concerns about the company’s short-term outlook.

Intel’s partnership with the Japanese government and AIST marks a major step forward for the company’s future in quantum computing. However, the challenges it faces in its restructuring and declining stock performance suggest that Intel has a long road ahead as it navigates the future of emerging technologies.