The potential loss of funding from the CHIPS Act has hit chip stock Intel (INTC) especially hard in recent months. With President Trump even going so far as to at least somewhat suggest clawbacks, that is especially telling. But a new tax bill is opening up some potential for real benefit, and investors are responding accordingly. In fact, Intel shares shot up nearly 8% in Tuesday afternoon’s trading.
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Word from Washington surrounding the so-called Big Beautiful Bill says that it contains a set of tax credits for semiconductor firms. These credits increase from their current 25% to a new level, 35%. Intel has been investing staggering amounts of cash into building out its foundry operations, and has received $7.86 billion so far in direct government grants. With a hefty new set of tax credits also kicking in, that represents some big new potential gain for Intel.
The down side to this, however, is that it also represents potential gain for Intel competitors operating within the United States. For instance, Nvidia (NVDA) is also likely to add some new funding thanks to these tax credits as it moves to supply demand for artificial intelligence (AI) training hubs and the graphics processing unit (GPU) chips that run them.
And More Layoffs
Intel layoffs have been a frequently occurring news item of late, and today proves no exception. More layoffs are about to start at four of Intel’s operations in Oregon. On July 15, 529 people will be shown the door at Intel, likely never to return. The Aloha campus, Ronler Acres location, Hawthorne Farms and Intel Jones campuses are all set to see some amount of personnel loss.
This is part of the push that Intel announced back in June, the “double decimation” plan that would see between 15% and 20% of Intel’s workforce let go. A Worker Adjustment and Retraining Notification (WARN) Act notice mentioned that impacted positions included product development operations, system and software optimization, development tools software, cloud systems, and program managers.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 36.4% loss in its share price over the past year, the average INTC price target of $21.44 per share implies 9.13% downside risk.
