It was a rough summer for Intel stock, down more than 30% since late June as investors worried that the chip manufacturer would struggle to sustain its lofty valuation as the artificial-intelligence buildout slows.

But shares were finally getting a much-needed boost on Wednesday thanks to a report of a potential deal with South Korean memory-chip maker SK Hynix. The tie-up looks like a win-win.

The agreement could lead to SK Hynix either leasing part of Intel's planned chipmaking facility in Ohio or forming a venture with Intel and major cloud firms, Reuters reported, citing three people familiar with the matter.

Talks are exploratory at this stage and opposition from South Korea's government could be a major hurdle to the deal, the report added.

Intel and SK Hynix didn't immediately respond to requests for comment from Barron's.

Both stocks rallied on the news. Intel rose 4.8% to $101.81 ahead of the opening bell. SK Hynix's American depositary receipts added 3.6%.

The tie-up would give Intel a presence in memory chips, which have been the hottest AI trade this year. The company was at one point a dominant player but exited when it offloaded its flash-memory business to none other than SK Hynix in 2020.

Meanwhile, a partnership with Intel would give SK Hynix more of a presence in the U.S. at a time when it is struggling to keep up with sky-high demand from Big Tech hyperscalers.