Intel's Stock Plummets 3% Amid Trump-Era Equity Stake Speculation: What's Next for the Chip Giant?

Summary
• Intel (INTC) trades at $23.845, down 2.91% from its previous close of $24.56
• Intraday range spans $23.21 to $24.8995 amid heightened volatility
• Trump administration reportedly mulls converting $10.9B in grants to a 10% equity stake
Intel’s stock faces a dramatic intraday selloff as speculation intensifies over the Trump administration’s potential equity stake in the chipmaker. The move, tied to converting Chips Act grants into shares, has triggered a sharp reversal from last week’s 23% rally. With the stock trading near its 52-week low of $17.665, investors are recalibrating risk amid geopolitical and corporate governance uncertainties.

Government Equity Stake Sparks Investor Reassessment
The Trump administration’s rumored plan to convert $10.9 billion in Chips Act grants into a 10% equity stake in Intel has triggered a sharp selloff. At a current market cap of $103.3 billion, this would value the stake at $10.5 billion, effectively diluting existing shareholders. The move, framed as a strategic intervention to bolster U.S. chip manufacturing, has instead spooked investors who fear regulatory overreach and reduced corporate autonomy. Analysts note the lack of clarity on whether the administration will inject new capital or merely reclassify existing grants, compounding uncertainty. The stock’s 3.3% drop reflects a shift from last week’s optimism, where the same rumor initially drove a 23% surge.

Semiconductor Sector Volatility Amid Geopolitical Tensions
The broader semiconductor sector remains in flux as U.S.-China trade tensions and domestic policy shifts reshape dynamics. While Intel’s decline mirrors the sector’s 0.37% intraday gain, peers like AMD and NVIDIA face distinct pressures. AMD’s -0.95% drop highlights competitive concerns, while NVIDIA’s 0.82% rise underscores its dominant position in AI chips. China’s mandate for domestic AI chips and Trump’s proposed 100% semiconductor tariffs further complicate the landscape, creating divergent trajectories for firms reliant on U.S.-China trade flows.

Options Playbook: Leveraging Volatility in a Volatile Intel
• RSI: 74.56 (overbought), MACD: 0.22 (bullish), Bollinger Bands: $24.61 (upper), $21.34 (middle), $18.06 (lower)
• 200-day MA: $21.67 (below current price), 30-day MA: $21.93 (support zone)
Intel’s technicals suggest a bearish reversal from overbought territory, with key support at $21.34 and resistance at $24.61. The stock’s -2.91% drop aligns with a breakdown scenario, making short-term bearish options attractive. Two top options from the chain:
• INTC20250822C24 (Call, $24 strike, 8/22 expiry): IV 68.39%, leverage 34.08%, delta 0.489, theta -0.171, gamma 0.209, turnover $3.11M. High leverage and moderate delta position this for a 5% downside scenario (payoff: $0.845).
• INTC20250822C24.5 (Call, $24.5 strike, 8/22 expiry): IV 70.54%, leverage 45.88%, delta 0.392, theta -0.152, gamma 0.195, turnover $1.22M. Strong gamma and liquidity make this ideal for a sharp decline (payoff: $0.345).
Aggressive bears should target INTC20250822C24.5 into a breakdown below $23.40 (30-day support).

Backtest Intel Stock Performance
Intel (INTC) has historically shown positive short-to-medium-term gains following a -3% intraday plunge. The backtest data reveals favorable win rates and returns for 3, 10, and 30 days after such events, with the maximum return occurring on day 14, suggesting that there is potential for recovery and even surpassing the previous trading day's high.

Bullish Breakout or Bearish Breakdown? Here's How to Position Your Portfolio
Intel’s selloff reflects a pivotal inflection point as the Trump administration’s equity stake proposal reshapes investor sentiment. While the stock’s technicals favor a continuation of the downtrend, the sector’s resilience—led by AMD’s -0.95% drop—highlights divergent risks. Key levels to watch: $21.34 (Bollinger lower band) and $24.61 (resistance). For now, short-term bearish options like INTC20250822C24.5 offer high leverage against a 5% downside. Investors should also monitor AMD’s performance, as its -0.95% decline signals broader sector fragility. Act now: Short INTC20250822C24.5 if $23.40 breaks, or pivot to longs if $24.61 holds.