A reported Qualcomm proposal to take over Intel was cheered by investors, but analysts question the practicality of such a deal given Intel's debt and Qualcomm's weak cash position.

Intel missed key markets like smartphones and AI, leading to its decline. A potential Qualcomm-Intel merger would be challenging and may not boost their AI presence. Investing in Intel is risky, with the company needing major changes to avoid further trouble.

Qualcomm Inc. has approached Intel Corp. to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever M&A deals.

Rumors about Qualcomm's attempt to take over Intel have been intensifying, despite various sources suggesting that "everything is still in the early stages." The market remains highly skeptical about Qualcomm fully acquiring the much larger Intel,

Qualcomm has approached the once-dominant chipmaker Intel for a potential buyout, turning the spotlight on the portfolio of products these chip companies have to offer.

One analyst notes that Intel’s situation doesn’t seem dire enough for the company to settle for a “fire sale.” Plus, Qualcomm could see Intel’s foundry assets as a headache.

The embattled chip giant has become a takeover target in recent days, but the tough act of separating the pros from the cons makes a takeover unlikely.