Intel stock closed up 3.3% on the news, after jumping as much as 9.5% when the story first broke. Qualcomm closed down 2.9% after sinking 6% earlier, showing Qualcomm investors didn't like the idea of a tie-up between the two chip giants.

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

A late-Friday report that Qualcomm recently made a "takeover approach" to Intel sent the latter company's shares higher.