Intel Stock Soars 11% on Trump Administration Investment Talks

On August 15, the stock price of Intel, a major American chipmaker, surged by over 7% in the late trading session, with further gains of over 4% in after-hours trading. This significant increase was driven by reports that the Trump administration was in discussions with Intel to potentially invest in the company, which has been facing challenges. The proposed investment aims to support Intel's plans to establish a manufacturing facility in Ohio.

The news of a potential government investment in Intel has sparked optimism in the market, reflecting a positive response to the potential collaboration. Intel has not officially commented on the negotiations but has expressed support for the Trump administration's initiatives. The discussions between the government and Intel underscore the strategic importance of the semiconductor industry and the efforts to bolster domestic chip manufacturing capabilities.

In recent years, Intel has struggled with declining performance due to its lag in the artificial intelligence chip manufacturing race. The company's market value has plummeted from 288 billion dollars in 2020 to approximately 104 billion dollars currently. Under the leadership of its new CEO, Intel has implemented significant cost-cutting measures, including a 15% reduction in workforce, the cancellation of multiple European factory projects, and the slowing down of the Ohio semiconductor plant's progress.

Industry insiders suggest that the government's investment could alleviate Intel's financial strain and provide the necessary funding for its Ohio-based manufacturing facility. However, experts caution that while the injection of capital may offer short-term financial relief, it may not address the long-term technological challenges faced by Intel. The potential investment aligns with the Trump administration's push for increased domestic chip production, a policy that has been a key focus since taking office. Intel is currently the only American company capable of manufacturing the most advanced chips within the country, although competitors like Taiwan Semiconductor Manufacturing Company and Samsung also have facilities in the United States.

Earlier this week, Intel's CEO visited the White House and met with the Trump administration. Following this meeting, the administration's stance on the CEO shifted positively, praising their leadership and commitment to advancing national and economic security. Intel has reiterated its dedication to collaborating with the Trump administration on shared priorities, although it has declined to comment on the rumors of a potential government investment.

Intel's stock price, which had declined by 60% in 2024, has since recovered by 19% this year. The company is currently navigating through its most challenging period on record. The Trump administration has increasingly involved itself in significant business transactions, reflecting a broader trend of government intervention in key industries. For instance, NVIDIA and AMD have agreed to a special arrangement where 15% of their chip sales revenue in China will be remitted to the U.S. government in exchange for export licenses. Additionally, the Pentagon has invested 400 million dollars in MP Materials, a rare earth minerals company, and acquired a "golden share" in U.S. Steel as part of the approval process for Nippon Steel's acquisition of the company.