Intel Corporation (INTC) Faces Challenges Despite Favorable Political Position

TD Cowen analyst Joshua Buchalter reiterated a Hold rating on Intel Corporation (NASDAQ:INTC) with a $20.00 price target following the US government's stake deal. The finalized agreement with the Trump administration on CHIPS Act and Secure Enclave funding is seen as positive, but Intel's issues are technical and competitive, and the firm remains uncertain about the company's future.

TD Cowen analyst Joshua Buchalter has reiterated a Hold rating on Intel Corporation (NASDAQ:INTC) with a $20.00 price target following the recent U.S. government's stake deal. The finalized agreement with the Trump administration on CHIPS Act and Secure Enclave funding is seen as a positive development, but Intel continues to face significant technical and competitive challenges. The firm remains uncertain about the company's future path.

Intel announced that the U.S. government will acquire a 9.9% stake in the company, with the investment amounting to approximately $8.9 billion. This includes $5.7 billion from previously awarded but unpaid CHIPS Act grants and $3.2 billion from the Secure Enclave program. The investment was made at a price of $20.47 per share, resulting in a 9.9% stake in the chipmaker.

While the government's investment is viewed positively, TD Cowen notes that Intel does not appear to be receiving meaningful net new capital. The firm emphasizes that Intel's core challenges are technical and competitive in nature, issues that funding alone cannot resolve. The research firm expressed difficulty gaining confidence in Intel's immediate and long-term path forward, stating that roadmaps and customer confidence cannot be rebuilt overnight.

Intel's market breadth and extensive intellectual property assets across compute are not discounted, but the firm's strategy seems to be in flux. The company's recent financial results, including a gross margin of 29.7% and non-GAAP losses of $0.10 per share, highlight the ongoing challenges faced by the semiconductor giant.

Despite these challenges, Intel's undervaluation is a point of interest for analysts. The company is trading at a 43.7% discount to intrinsic value based on DCF analysis and a Price-to-Sales ratio below the semiconductor industry average. The U.S. government's $11.1 billion investment and SoftBank's $2 billion infusion provide critical liquidity to support domestic manufacturing and R&D.

In conclusion, while the U.S. government's stake deal is seen as a positive development, Intel continues to face significant technical and competitive challenges. The firm's future path remains uncertain, and investors should exercise caution.

References:
[1] https://www.investing.com/news/analyst-ratings/intel-stock-holds-at-20-as-td-cowen-weighs-us-government-stake-93CH-4209207
[2] https://www.engadget.com/big-tech/the-us-government-drops-its-chips-act-requirements-for-intel-133049932.html
[3] https://www.ainvest.com/news/intel-strategic-turnaround-undervalued-growth-potential-2025-2508/