TLDR
- Intel stock jumped 3% on Thursday, bringing the monthly gain to over 50% with shares trading above $37
- The U.S. government’s 10% stake in Intel, purchased in August for $8.9 billion at $20.47 per share, is now worth approximately $16 billion
- The Trump administration bought 433.3 million shares through a negotiated investment deal in August
- Intel shares rose 7% on Wednesday following reports of early-stage talks with AMD to become a foundry customer
- Bernstein maintained its Market Perform rating with a $21 price target, calling Intel “fundamentally challenged” despite the recent rally
Intel stock climbed 3% on Thursday, capping off a month that has seen the chipmaker’s shares rocket more than 50% higher. The rally pushed the stock past $37 per share.
The surge has created a paper windfall for the U.S. government. The value of its 10% stake in Intel has grown to roughly $16 billion.
That’s nearly double what the government paid just two months ago.
The Trump administration negotiated an $8.9 billion investment in Intel common stock back in August. The deal involved purchasing 433.3 million shares at $20.47 each.
Press secretary Karoline Leavitt took to social media to celebrate the gains. She shared a post from the Association of Mature American Citizens highlighting the investment’s performance.
Talks with AMD Fuel Rally
Wednesday brought the biggest single-day move of the month. Intel shares jumped 7% after reports emerged that the company is in early discussions with AMD.
The talks focus on Intel potentially adding AMD as a foundry customer. Details remain scarce at this stage.
Semafor first reported the potential discussions between the two longtime rivals. The report provided limited information about what any deal might look like.
Questions remain about how much of AMD’s manufacturing could shift to Intel. It’s also unclear whether the arrangement would include a direct investment from AMD.
The companies haven’t confirmed the talks publicly. There’s no guarantee negotiations will lead to an agreement.
Analyst Caution Despite Stock Gains
Not everyone is buying into the rally. Bernstein maintained its Market Perform rating on Intel with a $21 price target on Thursday.
The firm’s target sits well below the current trading price. That represents potential downside of over 40%.
Bernstein described Intel as “fundamentally challenged” in its latest note. The firm acknowledged the headline-driven volatility but stuck with its cautious stance.
The research house warned that “more volatility remains in store for the shares.” They expressed wariness about betting against the stock given the headline risk.
Other recent developments have added to the swirl of activity around Intel. The company completed a $2 billion private placement with SoftBank Group in recent weeks.
That transaction involved selling 86,956,522 shares at $23 each. The deal was structured as a private sale under securities regulations.
Deutsche Bank raised its price target on Intel to $30 from $23 earlier. The bank maintained its Hold rating despite the increase.
Reports have also surfaced about Intel approaching Taiwan Semiconductor Manufacturing Company. The Wall Street Journal reported discussions about potential investments or partnerships.
Bloomberg separately reported that Intel held preliminary talks with Apple. Those discussions explored possible collaboration in chip manufacturing, design, or packaging.
Gene Munster from DeepWater Asset Management suggested Apple’s interest might be politically motivated. He indicated it may not be driven by strategic considerations.
Intel’s stock has gained nearly 80% year-to-date according to recent data. The shares are approaching their 52-week high of $36.30.
The government’s investment has proven timely so far. The stake purchased at $20.47 now trades at over $37 per share.
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