Intel (INTC) has confirmed that it received $5.7B in funding from the US Government in exchange for an equity stake. Washington previously announced plans to acquire a 10% stake in the chipmaker, something Trump has been pushing for to put the US back in front of the AI and semiconductor race.
Intel previously acknowledged in a corporate filing that the deal could spark mixed reactions from investors, employees, and global partners. The company cautioned about potential litigation and heightened scrutiny as negotiations continue. As a result, INTC shares fell following the initial inquiry by the Trump Administration to purchase a 10% stake in Intel.
Furthermore, the White House also said last month that the administration could convert other Chips Act awards into equity stakes. It’s not clear whether that idea has gained traction broadly within the administration or whether officials have broached the possibility with any companies that could be affected. However, the proposal for a 10% stake in Intel by the Trump administration raised significant concerns among investors regarding potential conflicts of interest and governance challenges.
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At press time, Intel INTC stock is trading in the middle of its 52-week range and above its 200-day simple moving average. Based on the one-year price targets offered by 34 analysts on GuruFocus, the average target price for Intel Corp is $21.97, with a high estimate of $28.00 and a low estimate of $14.00. The average target implies a downside of -9.77% from the current price of $24.35. Meanwhile, CNN analysts are a lot more conservative ahead of the US Government Intel stake acquisition. Out of 44 analysts surveyed by the platform, 84% give INTC a hold rating, with only 5% suggesting to invest now.
In terms of a hike to $30, there is a lot of uncertainty around Intel to confirm that the forecast is possible. Wall Street experts seem to agree, and it would be wise to wait before making an investment decision around INTC stock, at least until the stake sale is final. Furthermore, Intel faces plenty of pressure from increased competition, especially from Advanced Micro Devices (AMD) and Nvidia (AMD) in that space.