Intel Faces Leadership Scrutiny and Legal Challenge Amid Acquisition Plans

Intel Corporation finds itself navigating a complex web of challenges. The chipmaker's shares closed Thursday's session down 3.11% at $39.51, pressured by a dual onslaught of governance concerns and a serious legal filing. These developments threaten to disrupt the company's fragile recovery narrative.

On December 11, Intel confirmed it had signed a non-binding letter of intent to acquire the artificial intelligence startup SambaNova Systems. The startup is known for its promising Reconfigurable Data Flow Unit (RDU) AI hardware architecture. However, the proposed deal is shrouded in controversy due to the involvement of Intel's own Chief Executive Officer, Lip-Bu Tan.

Mr. Tan, who assumed the CEO role at Intel in March 2025, concurrently holds the position of Executive Chairman at SambaNova Systems. This overlap has ignited fresh scrutiny over potential conflicts of interest. Market observers note a familiar pattern; Intel's board previously declined to acquire another AI startup, Rivos, where Tan was also Chairman and an investor, citing similar conflict concerns. That company was ultimately purchased by Meta. Investors are now questioning whether corporate governance lessons have been adequately learned.

Lawsuit Alleges Components in Russian Weaponry

Simultaneously, a significant class-action lawsuit was filed against the company. The Watts Law Firm submitted the complaint to a federal court in Texas on December 11. The legal action also names AMD, Texas Instruments, and Mouser Electronics as defendants.

Should investors sell immediately? Or is it worth buying Intel?

The suit alleges the firms exhibited "deliberate ignorance," allowing their semiconductor components to be integrated into Russian missiles and drones used against civilian targets in Ukraine. It specifically cites the attack on the Okhmatdyt children's hospital, where Western-sourced parts were allegedly found in the weaponry. The accusations carry substantial legal and reputational risk, despite Intel's denial of any control over secondary supply chains.

A Precarious Turnaround at Risk

This confluence of negative news arrives at a sensitive juncture for Intel. After hitting a low of $17.67 in April, the stock had more than doubled to $44.02 by early December. CEO Tan's aggressive restructuring strategy and a sharp focus on the AI inference market had fueled this rebound and restored a degree of market confidence.

Nevertheless, the equity's valuation appears demanding. A trailing price-to-earnings ratio exceeding 800, coupled with a forward P/E estimated between 93 and 125, suggests high expectations are already priced in. Analyst views remain mixed: Barclays reaffirmed its "Hold" rating on December 12 with a $35 price target, notably below the current trading level. In contrast, Mizuho Securities upgraded the stock to "Buy," pointing to momentum in Intel's foundry business.

A Critical Support Level and Coming Catalysts

The $39 price level is now viewed as a key technical support zone for the stock. A sustained break below it could trigger a deeper correction. The investment community is awaiting official details on the terms of the SambaNova transaction and a formal board response to the conflict-of-interest allegations. The next major milestone will be the quarterly earnings report scheduled for January 29, 2026, an event likely to dictate the stock's near-term trajectory.