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Intel (INTC) shares jumped as much as 8% on Friday following reports that President Donald Trump’s administration is considering taking a sizable stake in the troubled chipmaker.
The U.S. government is already in talks to invest in INTC, providing funds the company will use to accelerate setting up factories in Ohio, according to Bloomberg.
Intel stock has been range-bound since the start of 2025. At the time of writing, it’s up nearly 40% versus its year-to-date low – but down roughly 10% versus its February high.
How a Government Stake Could Benefit Intel Stock
The U.S. government’s reported plans of investing in INTC signals strategic confidence in the firm’s role in national tech infrastructure, especially amid global chip shortages and heightened geopolitical tensions.
A sizable stake would indicate long-term state support, reducing financial risk, and lifting investor sentiment surrounding Intel shares.
Plus, accelerated factory development will improve domestic production capacity, helping ease supply chain constraint and position Intel as a key player in the U.S. semiconductor industry.
In short, federal backing could prove an instrumental ingredient for a sustainable recovery in INTC stock.
Federal Backing Isn’t an All-Clear for INTC Shares
Despite a meaningful increase in the Intel share price today, Bernstein’s analyst Stacy Rasgon remains unconvinced that a government investment is the answer to the company’s underlying issues.
On Friday, Rasgon maintained his “Market Perform” rating and $21 price target on INTC shares, indicating potential downside of more than 17% from current levels.
In his research note, Rasgon said Intel’s salvation lies in a better vision – not more money – adding “without a solid process roadmap, the entire exercise would be economically equivalent to simply setting 10s of billions of dollars on fire.”
Moreover, what the Trump administration would want from Intel in return is another wild card that makes the news perhaps not as bullish as investors believe, he concluded.
Wall Street Isn’t Bullish on Intel
Investors should tread with caution on Intel stock at current levels also because Wall Street analysts are not particularly bullish on the semiconductor company.
The consensus rating on INTC shares currently sits at “Hold” only with the mean target of roughly $23 indicating potential downside of some 10% from here.
