In an odd twist, another reaction emerged about the recent deal between chip stock Intel (INTC) and the Trump administration. This time, it was long-time Trump antagonist Sen. Elizabeth Warren who came out kind of mixed about the deal. This did not even sort of balk shareholders, though, as shares were up over 2% in Thursday afternoon’s trading.
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Sen. Warren was not specifically opposed to the deal, as she came out in support of the idea of equity stakes in general. But, perhaps realizing that she was publicly supporting President Trump in saying so, she quickly qualified the remark in a letter to the Commerce Department. A report from The American Prospect noted that Trump had apparently replaced the various terms Intel needed to follow as part of the CHIPS Act with the equity stake by itself.
Warren had previously tried to put in an amendment to the CHIPS Act that would have basically handed over equity stakes—warrants, equity or senior debt—in exchange for those grants. And while the amendment failed, Trump took the ball and ran with it. However, Warren meant for the equity stakes to be used alongside other tools, not as a replacement for them, prompting her letter to the Commerce Department.
A New Plant…In India
And then, in a move that might be regarded as tone-deaf given the sheer amount of money the American people put into Intel—as expressed by that equity stake—Intel joined a coalition of companies setting up a chip plant in India.
CEO Lip-Bu Tan will be visiting India before the year is up, reports note, and while there, he will be visiting Odisha to see the groundbreaking ceremony for a new semiconductor plant owned by 3D Glass Solutions. Along with silicon carbide company SicSem, the plant is set to start up sometime in the next two years.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 25 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 23.71% rally in its share price over the past year, the average INTC price target of $22.34 per share implies 9.66% downside risk.
