Intel stock rallied Friday on news that the Trump administration is interested in taking a stake in the chip giant.
Intel rose 7.4% to close at 23.86 after Bloomberg reported Thursday that the White House is in talks with the semiconductor company about the government acquiring a stake in the struggling behemoth. The shares climbed nearly 3% premarket.
The plan emerged from this week's meeting between President Donald Trump and Intel Chief Executive Lip-Bu Tan, Bloomberg reported, citing unnamed sources.
The news marked another unexpected twist in a tumultuous period for the chipmaker and its rocky relationship with the Trump administration.
Intel Recovers From Trump Saying CEO Must Go
Last week, its shares fell sharply after President Trump called the chip giant's Chief Executive, Lip-Bu Tan "highly conflicted" and said he "must resign."
"The CEO of INTEL is highly CONFLICTED and must resign immediately. There is no other solution to this problem," Trump said in a Truth Social post.
Bernstein analyst Stacy Rasgon said the report is good news for Intel.
Good News For Intel
"Trump has now done an apparent 180 in his feelings for both the company and its CEO," Rasgon told clients in a note."
Once the most dominant semiconductor company in the world, Intel has struggled to keep up with faster rivals led by AMD and Nvidia, especially in artificial intelligence.
"As Intel's prospects have dimmed, the idea of support (governmental or otherwise) has gained traction," Rasgon wrote. The idea is "understandable given the company, for better or worse, remains the only US-headquartered prospect for leading edge semiconductor chips and processes; it seems like Trump may have been persuaded to see the light."
Intel Stock: What It Means For Investors
Intel, in fact, has not been a good stock to own for many years.
The Silicon Valley giant's stock has never regained its peak before the tech bubble burst in 2000. The shares have badly underperformed the market the past five years. Since the start of 2020, Intel stock has dropped roughly 60%, while the S&P 500 has doubled. Intel stock has a dismal Relative Strength rating of 14, according to IBD MarketSurge.
To find growth stocks to watch and possibly buy now, check out the IBD Stock Of The Day and consider this three-step investing routine.
