diff --git a/src/Type/TypeCombinator.php b/src/Type/TypeCombinator.php
index b7ae9ba4cb..bd463144b5 100644
--- a/src/Type/TypeCombinator.php
+++ b/src/Type/TypeCombinator.php
@@ -13,6 +13,7 @@
 use PHPStan\Type\Constant\ConstantFloatType;
 use PHPStan\Type\Constant\ConstantIntegerType;
 use PHPStan\Type\Constant\ConstantStringType;
+use PHPStan\Type\Generic\GenericClassStringType;
 use PHPStan\Type\Generic\TemplateBenevolentUnionType;
 use PHPStan\Type\Generic\TemplateType;
 use PHPStan\Type\Generic\TemplateTypeFactory;
@@ -975,6 +976,14 @@ public static function intersect(Type ...$types): Type
 						continue 2;
 					}
 
+					if ($types[$i] instanceof GenericClassStringType && $types[$j] instanceof GenericClassStringType) {
+						$genericType = self::intersect($types[$i]->getGenericType(), $types[$j]->getGenericType());
+						$types[$i] = new GenericClassStringType($genericType);
+						array_splice($types, $j--, 1);
+						$typesCount--;
+						continue;
+					}
+
 					continue;
 				}
 
diff --git a/tests/PHPStan/Analyser/NodeScopeResolverTest.php b/tests/PHPStan/Analyser/NodeScopeResolverTest.php
index 5f74fb9820..fcc2d22928 100644
--- a/tests/PHPStan/Analyser/NodeScopeResolverTest.php
+++ b/tests/PHPStan/Analyser/NodeScopeResolverTest.php
@@ -1038,6 +1038,7 @@ public function dataFileAsserts(): iterable
 		yield from $this->gatherAssertTypes(__DIR__ . '/data/cli-globals.php');
 		yield from $this->gatherAssertTypes(__DIR__ . '/data/bug-8033.php');
 		yield from $this->gatherAssertTypes(__DIR__ . '/data/constant-array-union-unshift.php');
+		yield from $this->gatherAssertTypes(__DIR__ . '/data/bug-7987.php');
 	}
 
 	/**
diff --git a/tests/PHPStan/Analyser/data/bug-4875.php b/tests/PHPStan/Analyser/data/bug-4875.php
index d58ea60d12..ee0e89a44d 100644
--- a/tests/PHPStan/Analyser/data/bug-4875.php
+++ b/tests/PHPStan/Analyser/data/bug-4875.php
@@ -30,8 +30,8 @@ function doFoo()
 		$mock = $this->mockIt(Blah::class);
 
 		assertType('Bug4875\Blah&Bug4875\Mock', $mock);
-		assertType('class-string<Bug4875\Blah>&class-string<Bug4875\Mock>&literal-string', $mock::class);
-		assertType('class-string<Bug4875\Blah>&class-string<Bug4875\Mock>', get_class($mock));
+		assertType('class-string<Bug4875\Blah&Bug4875\Mock>&literal-string', $mock::class);
+		assertType('class-string<Bug4875\Blah&Bug4875\Mock>', get_class($mock));
 	}
 
 }
diff --git a/tests/PHPStan/Analyser/data/bug-7987.php b/tests/PHPStan/Analyser/data/bug-7987.php
new file mode 100644
index 0000000000..23bda9fb31
--- /dev/null
+++ b/tests/PHPStan/Analyser/data/bug-7987.php
@@ -0,0 +1,53 @@
+<?php declare(strict_types=1);
+
+namespace Bug7987;
+
+use function PHPStan\Testing\assertType;
+
+class AbstractA{}
+class AbstractB{}
+
+class Factory
+{
+	/**
+	 * @template TypeObject of AbstractA|AbstractB
+	 * @param  class-string<TypeObject> $objectClass
+	 * @return TypeObject
+	 */
+	public function getObject(string $objectClass): AbstractA|AbstractB
+	{
+		if (is_subclass_of($objectClass, AbstractA::class)) {
+			assertType('class-string<TypeObject of Bug7987\AbstractA (method Bug7987\Factory::getObject(), argument)>', $objectClass);
+			$object = $this->getObjectA($objectClass);
+			assertType('TypeObject of Bug7987\AbstractA (method Bug7987\Factory::getObject(), argument)', $object);
+		} elseif (is_subclass_of($objectClass, AbstractB::class)) {
+			assertType('class-string<TypeObject of Bug7987\AbstractB (method Bug7987\Factory::getObject(), argument)>', $objectClass);
+			$object = $this->getObjectB($objectClass);
+			assertType('TypeObject of Bug7987\AbstractB (method Bug7987\Factory::getObject(), argument)', $object);
+		} else {
+			throw new \Exception("unable to instantiate $objectClass");
+		}
+		assertType('TypeObject of Bug7987\AbstractA (method Bug7987\Factory::getObject(), argument)|TypeObject of Bug7987\AbstractB (method Bug7987\Factory::getObject(), argument)', $object);
+		return $object;
+	}
+
+	/**
+	 * @template TypeObject of AbstractA
+	 * @param class-string<TypeObject> $objectClass
+	 * @return TypeObject
+	 */
+	private function getObjectA(string $objectClass): AbstractA
+	{
+		return new $objectClass();
+	}
+
+	/**
+	 * @template TypeObject of AbstractB
+	 * @param class-string<TypeObject> $objectClass
+	 * @return TypeObject
+	 */
+	private function getObjectB(string $objectClass): AbstractB
+	{
+		return new $objectClass();
+	}
+}