Shares of microchip developer Intel (INTC) rose sharply by the close of trading on Friday after The Wall Street Journal published an article stating that rival chipmaker Qualcomm (QCOM) was interested in a takeover.

The article cited unnamed sources as saying that Qualcomm executives had contacted Intel about a possible acquisition, but that “a deal is far from certain.” Shortly after the market closed over the weekend, INTC shares rose as much as 7% as reports of a possible acquisition by Qualcomm spread. QCOM shares fell nearly 5% in subsequent trading after the news broke.

Intel in a tight spot

Qualcomm’s move comes at a difficult time for Intel. INTC shares have fallen 55 percent this year and are among the worst performers in the benchmark S&P 500 index. Intel’s stock has been hit by a series of subpar financial results. The company recently announced that it plans to spin off its foundry business, which makes microchips and processors for other companies, into a subsidiary.

Intel also announced plans to cut 15,000 jobs and suspended quarterly dividend payments to shareholders. There have been rumors that INTC stock could be removed from the blue-chip Dow Jones Industrial Average index when it is next rebalanced. Intel has invested $25 billion in each of the past two years to develop its foundry business, but the shift from design to manufacturing microchips has been plagued by delays and has brought little revenue to the company.

Is INTC stock a buy?

Currently, there is a consensus recommendation for INTC stock among 34 Wall Street analysts: Hold. This recommendation is based on one buy recommendation, 26 hold recommendations and seven sell recommendations in the last three months. The average price target for INTC stock of $25.47 implies an upside potential of 16.62% from current levels.

Read more analyst ratings on INTC shares