Last week, we got word that chip stock Intel (INTC) was under fire thanks to its CEO, Lip-Bu Tan. Specifically, Tan was under fire for his potential connections to Chinese businesses, including some with connections themselves to the People’s Liberation Army. But Tan is heading out to Washington to address these matters himself. And investors rallied around their CEO, sending Intel shares up nearly 4% in Monday afternoon’s trading.
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Tan went out to the White House after remarks from Thursday, in which President Trump called for the immediate removal of Intel’s CEO due to potential connections to the Chinese military. And so, Tan decided to take action and explain exactly what his background was to President Trump in a bid to clear things up. He also hoped to find ways that the government and Intel could more effectively collaborate, which would likely be a good plan, given how much taxpayer money is currently tied up in Intel thanks to the CHIPS Act.
Tan himself noted, “There has been a lot of misinformation circulating about my past roles … I want to be absolutely clear: Over 40+ years in the industry, I’ve built relationships around the world and across our diverse ecosystem — and I have always operated within the highest legal and ethical standards.” Hopefully this meeting will produce some new options going forward. With a potentially huge tariff about to land on the chip market, it could be a real opportunity for Intel, which is mostly produced in the United States.
“Artless Bullying”
Interestingly, Trump’s remarks actually managed to pull one analyst into Intel’s camp. Michael Moritz, formerly with Sequoia Capital, declared that Intel should stand by Lip-Bu Tan after Trump engaged in what Moritz called “artless bullying.” “Trump’s assault has no modern precedent,” Moritz declared, noting that it was a “…vindictive political sideshow.”
Moritz then doubled down, saying “Now the Intel board must decide whether to march to the beat of so many other corporate leaders and capitulate to the president’s artless bullying or to set an example for other companies and display some backbone. Early signs of defiance are encouraging.”
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 3.05% rally in its share price over the past year, the average INTC price target of $22.10 per share implies 6.94% upside potential.
