Shares of Intel (INTC) closed up 6% on Aug. 22 after President Donald Trump said the chipmaker has agreed to give the U.S. government a 10% equity stake in its business.
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Speaking to reporters at the White House, President Trump said the government would receive a 10% stake in Intel, which has a market capitalization of $110 billion. “They’ve agreed to do it and I think it’s a great deal for them,” said the president.
The comments were made ahead of a late afternoon meeting between Intel CEO Lip-Bu Tan and President Trump. A formal agreement for Intel to give the U.S. government the 10% stake was made after the stock market closed on Aug. 22.
Latest Deal
A stake in Intel is the latest example of the U.S. government getting more involved in the private sector, particularly as it relates to industrial policy. The Trump administration sought an equity stake in Intel in exchange for government funding provided to the company through the CHIPS Act that seeks to develop the American semiconductor industry.
The Trump administration has also recently taken a stake in rare-earth company MP Materials (MP) and received a position in U.S. Steel in exchange for approving its sale to Japan’s Nippon Steel (NISTF). Earlier this week, Intel announced another major backer, Japanese conglomerate SoftBank (SFTBY), would make a $2 billion investment in its business, equal to about 2% of the company.
Intel is the only American company capable of making the most advanced microchips and processors on U.S. soil through its foundry business. Intel has received more than $8 billion in grant money under the CHIPS and Science Act that was passed in 2022 by the previous administration of U.S. President Joe Biden. INTC stock is up 24% this year.
Is INTC Stock a Buy?
The stock of Intel has a consensus Hold rating among 30 Wall Street analysts. That rating is based on one Buy, 26 Hold, and three Sell recommendations issued in the last three months. The average INTC price target of $22.34 implies 10.46% downside from current levels.
