President Trump has a surprising amount of power when it comes to business operations. But is that power sufficient to convince chip stock Intel (INTC) to dismiss its CEO? Trump called for the immediate resignation of Lip-Bu Tan from Intel, and investors howled their displeasure. Intel stock fell nearly 4% in Thursday afternoon’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The report comes amid plans from the Trump administration to put a hefty new tariff on imported computer chips: 100%. The tariff would be removed if companies either started making their chips, or developed sufficient plans to make them, in the United States. And this likely would have been a significant help for Intel, at least, until Trump took aim at Lip-Bu Tan.
The bleak pronouncement from the Trump administration arrived after a letter from Senator Tom Cotton went to Frank Yeary, Chairman of the Board at Intel. The report called particular attention to “…the security and integrity of Intel’s operations and its potential impact on U.S national security.” Cotton’s letter also asked Intel if it knew about any outstanding subpoenas addressed to Lip-Bu Tan’s former firm, and whether or not Tan still had ties to China.
Then Trump Weighed In
After that letter arrived, Trump took to social media to weigh in himself. Trump pulled no punches, declaring, “The CEO of Intel is highly conflicted and must resign, immediately. There is no other solution to this problem.”
Reports noted that Lip-Bu Tan had made “…hundreds of investments in Chinese companies…” dating back over the last few decades. Some of those investments were made personally, while others were made through venture funds that he had some connection with. Some of those investments, reports noted, were with companies that had connections to the People’s Liberation Army, the Chinese military. While this may be more of a tempest in a teapot than anything else, the idea that someone from here might get the idea to start eyeing Intel’s receipt of CHIPS Act money with the word “clawback” in mind is not outlandish in response.
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 three Sells assigned in the past three months, as indicated by the graphic below. After a 0.39% loss in its share price over the past year, the average INTC price target of $22.18 per share implies 12.73% upside potential.
