Intel's stock experienced an increase of over 3% in early trading on Friday, following a report indicating that the struggling chipmaker is exploring various strategic options, including a potential merger or divestiture.

This news has sparked renewed interest among investors after the stock faced one of its most significant downturns in decades.

According to a report from Bloomberg News on Thursday, the company is collaborating with investment bankers to evaluate several alternatives, such as separating its core product division from its unprofitable manufacturing segment.

Additionally, Intel is contemplating the possibility of halting certain factory projects, as stated in the report.

The expansion and development of chip production facilities are central to Intel's strategy to reposition itself as a contract manufacturer for other semiconductor companies—a capital-intensive initiative that has put considerable pressure on the company's financial resources.

On Friday, Intel's market capitalization was poised to increase by over $4 billion, recovering from a dip below the $100 billion threshold earlier in August for the first time in thirty years.

This report has offered some reassurance to investors, many of whom believe that a business split could be a favorable solution as Intel navigates the challenges of the AI landscape, lagging behind competitors like Nvidia and AMD.

So far this year, Intel's shares have plummeted by approximately 60%, in stark contrast to AMD's modest decline of less than 2%. Nvidia's stock, on the other hand, has more than doubled in value this year.

The company's disappointing quarterly results released in August, along with the suspension of its dividend and the announcement of layoffs affecting 15% of its workforce, have exacerbated the decline in its stock price.

Currently, Intel's shares are trading at around 24 times projected earnings, while AMD's price-to-earnings ratio stands at 30.6, and Nvidia's is at 33.7 times expected earnings.