Intel's Government Investment Raises Concerns for the Company's Future

Intel stock is up slightly after the US government announced a 10% stake in the chip giant. The deal is getting favorable reviews on the Street, but it's not ideal for Intel as CEO Lip-Bu Tan will have the Trump administration breathing down his neck while trying to save the company. The government is likely betting on Intel's money-losing chip-building outfit, which the company may need to sell to save itself.

Intel (INTC) stock experienced a slight increase following the U.S. government's announcement of a 10% stake in the chip giant. The deal, which is still subject to approval from Intel's board and potential legal challenges, aims to bolster domestic semiconductor production. The government's equity stake, valued at $8.9 billion, positions the U.S. as one of Intel's largest shareholders, with a 9.9% stake in the company [3].

The news has been met with mixed reactions on Wall Street. While analysts and brokerage firms have provided a "Hold" status on Intel's stock, suggesting a neutral market sentiment, the average one-year price target stands at $21.91, with projections ranging from $14.00 to $28.00 [1]. GuruFocus estimates Intel's GF Value to be $23.31 for the upcoming year, indicating a potential downside of 5.76% from its current price of $24.735 [1].

Intel's CEO, Lip-Bu Tan, has expressed gratitude for the government's confidence in Intel's potential to advance U.S. technology and manufacturing leadership. However, the deal may complicate the company's efforts to save its money-losing chip-building outfit, which could potentially be sold to save Intel [2]. The government's stake in Intel is part of a broader strategy by the Trump administration to secure a government role in major U.S. firms, following similar moves with U.S. Steel and chipmakers Nvidia and AMD [3].

References:
[1] https://www.gurufocus.com/news/3075688/us-government-may-acquire-10-stake-in-intel-intc
[2] https://www.independent.co.uk/news/world/americas/us-politics/trump-intel-stake-chip-semiconductor-b2810001.html
[3] https://finance.yahoo.com/news/intel-stock-little-changed-after-trump-says-i-love-seeing-their-stock-price-go-up-140400445.html