As if the future of Intel were not already dramatic and desperate enough, company shares have unexpectedly been on a tear in recent days, jumping 25% in five days to $24.13 by market close on Thursday.
Jordan Klein at Mizuho Securities mused that trading Intel stock lately could even become the “Golden Boy Turnaround Long Idea for 2025.”
Some analysts attribute the Intel climb, at least partially, to Trump administration policy announcements intended to boost domestic AI production, which auger away from Biden-era regulations focused on safeguarding the public from the potential risk of AI and autonomous decision-making
President Trump signed Executive Order 14179, calling for an action plan to foster AI innovation by reducing regulatory barriers and promoting US leadership in AI. The EO was signed on Jan. 23, two weeks before the big Intel share boost, but it wasn’t published in the Federal Register until Jan. 31 and it apparently took days for investors and analysts to fully appreciate what it means, alongside whispers in the investor and Trump camps.
Some pronouncements were more overt. Vice President Vance gave further support indirectly to Intel in an address at the AI Summit in Paris on Tuesday. “To safeguard America’s advantage, the Trump administration will ensure that the most powerful AI systems are built in the US with American designed and manufactured chips, “ he said.
Intel is the only US company that both makes chips with its Intel Foundry and designs chips, largely for CPUs and other processors used in laptops and data centers.
“To maintain [AI] leadership, we must develop AI systems that are free from ideological bias or engineered social agendas,” the Trump administration EO says. “It is the policy of the United States to sustain and enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness and national security.”
The EO sets out 180 days for several officials to develop an action plan submitted to the president to meet the policy of promoting “human flourishing” and the other elements.
What any of the AI Trump administration policy directly has to do with Intel’s recent rise isn’t exactly a direct line from A to B, but there is no question President Trump is taking related steps to bolster AI through support for the ambitious $500 billion multi-year Stargate data center expansion effort and a commitment to allow faster power utility approvals to provide the needed electricity for big data centers.
Here’s why Intel figures so centrally in what’s happening.
Patrick Moorhead, chief analyst at Moor Insights & Strategy offered this thought to Fierce:
“The Trump administration wants more [chip] manufacturing done in the US, as Intel is the only US based company that does this and would be favored over TSMC even if they’re in the US. I believe the Trump administration is pressuring US design companies to work more closely to support this drive.”
TSMC is by far the largest producer of advanced chips globally, although it is based in Taiwan and has won US CHIPS Act grants to build fabs in the US. Taiwan’s future is under threats from China, both economically and militarily.
Moorhead also said the Trump administration is likely suggesting various chip designers including Nvidia, Broadcom, AMD and Marvell look at using the services of Intel Foundry to produce the chips they need. The 18A node from Intel isn’t the right choice for Apple or Qualcomm needs, but 14A might be more likely, he added. “I do believe 18A is looking good in performance and power from a big die standpoint and that yields for big die products are reasonable for this time in the cycle,” Moorhead said on a social post. “A lot more work to be done, though.”
Intel has taken steps to set up its foundry business as an independent operation, suggesting it could be contemplating a sale of the foundry side of Intel, separate from its design side. But Moorhead said he doesn’t believe a foundry sell off will happen anytime soon, and won’t be an outright acquisition by one rumored buyer, TSMC. “There could be cooperation, maybe some of a joint venture, but not an acquisition,” Moorhead told Fierce.
What shows with Intel’s share climb is how many moving parts are involved in Intel’s future.
Since Pat Gelsinger’s departure as CEO last year, there are two top managers operating at interim co-CEOs, one overseeing the Intel Foundry and the other overseeing, basically, design. A search for a permanent CEO is underway. The foundry is operating at a loss today, with a forecast it will make more than it spends by late 2027.
RELATED: Rumor whack: Caulfield as Intel CEO? GF to buy Intel foundry?
Meanwhile, Intel has received more than $7 billion in US CHIPS Act grants for future fabs in the US, amid concerns over what will happen to CHIPS Act grants under the Trump administration. The president has previously said the Act was “so bad” which has raised concerns over Intel’s grants. Trump’s pick for Commerce Secretary, Howard Lutnick, told senators he needs to analyze the grants already awarded with contracts before committing to honoring them.
RELATED: As chip sales hit record, US Senate considers Commerce czar
A veteran chip CEO worries over potential loss of Intel's stature
The concerns about Intel’s future are being felt widely, including by other chip executives like Mark Granahan, founder and CEO of iDeal Semiconductor Devices in Bethlehem, Penn. Granahan founded the company in 2017 after years at a variety of semiconductor companies and two stints at Texas Instruments going back to 1980. His current company has developed and begun sales of SuperQ technology to provide power loss reduction for power devices.
“Intel has stumbled,” he said in an interview with Fierce before the latest stock bounce was as clearcut. “Bell Labs evaporated and that was a national tragedy. If Intel continues on its current path, that would be a national tragedy. I was disappointed that Gelsinger was removed.”
Intel has been a victim of “15 years of miscues” made by finance professionals who were “not qualified” because they lacked the engineering insights necessary, Granahan added. “This is where I agree with Elon Musk that you don’t want an accountant running a company that makes airplanes. Same with Intel. I’m worried we are exposed.”
Granahan added: “From a business perspective, from being an American, it really bothers me. What’s happened at Intel is exposing us to economic and defense risk that we shouldn’t be exposed to. We have lost the lead in CMOS logic and if anything were to happen in that TSMC fab in Taiwan, all the CMOS nodes used by major US companies would be at risk.
“Intel should find someone to put in the leadership position with CMOS experience and lead TSMC. If they do that, that says their product business is going to be incredibly profitable and they can offer the leading edge.”
Were Gelsinger still in charge, Granahan concluded, it might have taken another two years to bring the foundry around, but “it would have been a major American success story.”
Finally, if anyone thought the recent upsurge in Intel stock was exciting, best to recall that Intel shares are still down 43% over a one-year span and 63% over five years.