Intel Corp (NASDAQ:INTC, ETR:INL) shares continued to gain momentum on Monday even after the company warned that the US government's stake could pose risks to its business. On Friday, the US government acquired a 9.9% stake in Intel by investing approximately $8.9 billion, marking one of the largest federal interventions in a US company since 2008, with an option to increase its stake by another 5% under specific conditions.
Intel (INTC) shares added to their Friday gains following word the U.S. had taken about a 10% stake in the struggling chipmaker.
Intel Corporation (NASDAQ: INTC) shares were trading at $25.25 on Monday, up 3.02% on the day and more than 22% higher over the past month, after President Donald Trump declared that the United States “paid zero” for its newly acquired stake in the semiconductor giant.
The past week has seen many decrying the folly of government picking winners in business. But the Trump administration's announcement of an 8.9 percent equity stake in chipmaker Intel is a reminder that government mostly picks losers.
Intel said on Monday that the 10% stake by the U.S. government in the chipmaker could pose risks to its business, from potentially harming international sales to limiting its ability to secure future government grants.
A look at the chart suggests shares aren't ready to break higher even after President Donald Trump announced the U.S. would take a 10% stake.
Just five months into his tenure as Intel's CEO, Lip-Bu Tan was fighting for his job. Getting to a truce with the president was a two-week roller-coaster ride.
The Chips Act wasn't about raising revenue, and an equity share wouldn't enhance national security.
U.S. President Donald Trump is injecting nearly $9 billion into Intel in exchange for a 9.9% equity stake. But the money - which the struggling chipmaker was slated to receive anyway under a federal funding act - will not be enough for its contract-chipmaking business to flourish, analysts said.
In the seven months since President Donald Trump's inauguration, Wall Street's major stock indexes have been taken on quite the ride.
Intel (INTC) shares surged Friday, as President Trump said the U.S. government struck a deal giving it a 10% stake in the struggling chipmaker.
Intel Corporation is a national security asset, transitioning from PC-focused chipmaker to foundry services under new CEO Lip-Bu Tan. Government's proposed 10% equity stake and SoftBank investment could provide critical capital relief for debt reduction and turnaround efforts. Fed rate cuts offer near-term relief on revolvers and short-term debt, with refinancing benefits possible if 10-year yields decline.