Intel Stock Surges as New Tax Bill Offers Potential Benefits.

Intel stock surged 8% after a new tax bill proposed tax credits for semiconductor firms, increasing from 25% to 35%. The bill could bring significant benefits to Intel, which has invested heavily in foundry operations and received $7.86 billion in direct government grants. However, the tax credits may also benefit competitors like Nvidia. Analysts have a Hold consensus rating on INTC stock with an average price target of $21.44, implying 9.13% downside risk.

Intel Corporation (INTC) stock surged 8% on July 2, 2025, following the announcement of a new tax bill that proposes increased tax credits for semiconductor firms. The bill, dubbed the ‘One Big Beautiful Bill,’ increases tax credits for semiconductor firms from 25% to 35%. This development is expected to bring significant benefits to Intel, which has invested heavily in foundry operations and received $7.86 billion in direct government grants under the U.S. CHIPS and Science Act [1].

The new tax credits are set to expire in 2026, providing Intel with a window to expand its manufacturing processes in the United States. Intel is committed to accelerating its Integrated Device Manufacturing (IDM) 2.0 strategy, which involves increasing manufacturing capacity to meet growing demand. The interim management is dedicated to maintaining the core strategy despite efforts to drive operational efficiency and agility [1].

Intel's interim CEO, Lip-Bu Tan, has hinted at a potential shift in focus from the 18A manufacturing process to the 14A process. This move aims to better rival Taiwan Semiconductor Manufacturing Co. (TSM) and court major clients such as Apple (AAPL) and Nvidia (NVDA). The shift could involve a one-time write-off of several hundred million to potentially over a billion dollars [3].

The tax credits are not only beneficial to Intel but also to other semiconductor firms. Nvidia Corporation (NVDA) is expected to gain significant funding for scaling AI infrastructure across federal agencies, research labs, and public-private data centers. Advanced Micro Devices, Inc. (AMD) is also likely to benefit from the new tax bill, with potential funding for expanding its domestic manufacturing operations [1].

Despite the potential benefits, analysts remain cautious. The consensus rating on INTC stock is a Hold, with an average price target of $21.44, implying a 9.13% downside risk [2]. The estimated GF Value for Intel Corp in one year is $23.86, suggesting an upside of +4.42% from the current price of $22.85 [3].

References:
[1] https://www.nasdaq.com/articles/can-intel-benefit-higher-tax-credits-new-tax-bill
[2] https://finance.yahoo.com/news/intel-benefit-higher-tax-credits-131500016.html
[3] https://www.tradingview.com/news/gurufocus:947c60a55094b:0-intel-intc-may-kill-18a-in-billion-dollar-bid-for-apple-nvidia/