Intel shares surged along with broader tech and chip stocks on Wednesday, as investors celebrated Donald Trump’s election victory. The company is set to be a major beneficiary of the CHIPS Act, which allocates $52.7 billion for American semiconductor activity. However, the law’s future under a Trump administration remains uncertain, given the former president’s past criticism of the act.
Intel stands to gain from the CHIPS Act, with billions of dollars in funding and tax relief on the line. The company has been investing heavily in new plants and technologies, including its foundry business. However, it faces challenges, such as a lack of disbursement from the law and competition from other chip manufacturers.
President Trump’s comments on the CHIPS Act have sparked speculation about his intentions for the law. Some analysts believe he may repeal or revamp the act to promote tariffs instead. House Speaker Mike Johnson has also suggested that the Trump administration could streamline the bill by removing costly regulatory requirements.
Intel’s stock performance is closely tied to federal policy, particularly with regards to the CHIPS Act. Investors should be cautious of any changes to the law, but a positive sentiment towards Trump’s victory may provide some reassurance for now. A potential buyout or merger with another chip company remains a possibility, given Intel’s challenges and strategic importance in the supply chain.
The uncertainty surrounding the CHIPS Act highlights the need for investors to monitor federal policy closely and be prepared for any outcomes. As one of the few American companies that designs and manufactures chips, Intel’s fate is deeply tied to the success of the law.
Source: https://www.fool.com/investing/2024/11/10/what-trumps-victory-means-for-intel-stock