Intel Corporation (INTC.US) issued a denial of rumors regarding the divestiture of its stake in Mobileye (MBLY.US), causing Mobileye's stock to surge nearly 8% in pre-market trading.

Intel Corporation (INTC.US) said on Thursday that it currently has no plans to divest its majority stake in the autonomous driving company Mobileye (MBLY.US). Mobileye's stock surged more than 10% in pre-market trading and was up nearly 8% by the time of writing, while Intel Corporation rose 2% in pre-market trading. Earlier this month, reports surfaced that Intel Corporation was considering selling some of its Mobileye holdings, leading to a sharp drop in Mobileye's stock price. The company's stock has fallen over 70% this year. In a statement, Intel Corporation stated, "As a major shareholder of Mobileye, Intel Corporation remains committed to value creation and is excited about the future of its business." "We currently have no plans to divest the majority stake in the company. By separating Mobileye and providing autonomy, the company can enhance its ability to capitalize on growth opportunities and accelerate progress in creating greater value. We believe in the future of autonomous driving technology and the unique role Mobileye plays as a leader in advanced driver assistance systems (ADAS) development and deployment." Wall Street analysts reacted slightly positively to this move. In 2017, Intel Corporation purchased Mobileye for $15.3 billion, but five years later, the autonomous driving company re-listed through an initial public offering (IPO), with Intel Corporation divesting some of its stake and raising $861 million in the IPO. Mobileye's annual report shows that as of December 30th last year, Intel Corporation held approximately 88.3% of the company's common stock. Mobileye has been focusing on addressing fluctuations in demand for its driving assistance chips. Due to weak international market demand, the company lowered its annual revenue and profit expectations in August. Intel Corporation has also been trying to turnaround its business by focusing on its chip manufacturing division and artificial intelligence processors. However, in recent months, the company's stock has plummeted due to layoffs, dividend suspensions, and the resignation of a high-profile board member. Intel Corporation CEO Pat Gelsinger recently made several statements, including suspending factory construction in Europe to support the company's financial and technological strength in response to shareholder pressure over the stock price decline. However, Intel Corporation announced on Monday a chip manufacturing agreement with Amazon.com, Inc.'s (AMZN.US) cloud computing division, which could give some momentum to Intel Corporation's manufacturing business. The tech giant has been aiming to compete with rivals like Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US).