Intel (INTC 3.25%) stock gained 4.1% through 9:45 a.m. ET Monday morning after CNBC reported this morning that the U.S. Commerce Department is close to awarding Intel an $8 billion subsidy to assist with expanding its semiconductor chip operations.
Beleaguered chipmaker Intel Corp (NASDAQ:INTC, ETR:INL) is losing half a billion dollars in government subsidies under US president Joe Biden's CHIPS and Science Act, according to a New York Times report. Intel has been the greatest benefactor of Biden's CHIPS Act, which allocated $39 billion in federal funding to enhance the US's domestic chipmaking capabilities.
Intel and the Commerce Department are close to finalizing a roughly $8 billion grant for the struggling chipmaker, according to a person familiar with the matter. The grant will support Intel's chip manufacturing expansion.
The U.S. government plans to reduce Intel Corp's preliminary $8.5 billion federal chips grant to less than $8 billion, the New York Times reported on Sunday citing unnamed sources.
Ken Griffin of Citadel Advisors just scooped up 11 million shares of a semiconductor stock not named Nvidia.
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You might be surprised to know Intel actually has more of these valuable assets than Taiwan Semiconductor.
Intel has been through the ringer, but we see signs of life. Significant cost cuts should give the company breathing room to reinvest into the segments that are working, and Foundry margins should improve as the unit matures. While there are serious risks when it comes to competition and execution, we think the stock, at less than 2x FWD sales, appears interesting.
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Intel's shares have been volatile, but Q3 results showed progress in cost reduction and potential for recovery, boosting investor optimism. New AI CPUs and Gaudi 3 AI accelerator launches could drive growth in Intel's Client Computing and Data Center businesses. Intel's foundry business has growth catalysts, including a custom AI chip deal with Amazon and a $3 billion grant under the Chips and Science Act.
Intel Corporation's shares have risen 28% since my Buy recommendation, yet they remain undervalued, trading at par to book value amidst market pessimism. Q3 revenues beat expectations at ~$13.3 billion, with promising growth in Data Center & AI, despite sluggish PC sales impacting Client Computing revenue. Intel's $10 billion cost-saving plan is on track, with potential operating margin improvements, but CHIPS Act grant delays and new administration pose risks.
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