Intel stock jumped late Friday on a report that Qualcomm had approached the chip giant about a possible takeover.
Qualcomm made its move in "recent days," the Wall Street Journal reported, citing unnamed sources.
It's unclear whether a deal was being considered, the report said.
But the report underlines the cloud of uncertainty surrounding what was once the most dominant semiconductor company in the world. Intel has struggled to keep up with rivals led by AMD and Nvidia, especially in the data center market and the fast-growing artificial intelligence trend.
A merger with Qualcomm will likely face intense antitrust scrutiny. Qualcomm is a major player in the market for smartphone chips and wireless communications technology.
The news also comes just days after Intel unveiled a major reorganization of its business, which included a plan to turn its manufacturing business into an independent unit with its own board. The Dow Jones chip giant also announced a $3 billion federal funding award to make chips for the Pentagon.
Mizuho Securities analyst Jordan Klein told clients in a note that the news "moves (the) patient from life support to critical condition."
"If there was ever a company and stock in need of some positive news flow it was Intel," Klein said. "Shares were down 60% year to date and grinding lower and lower vs. (the) semi sector up 34% year to date."
Intel stock rallied more late afternoon trades, gaining 3.3% to close at 21.84. Qualcomm shed 2.9% to close at 168.92.
