So here’s a plot twist nobody saw coming: The U.S. government just bought a 10% stake in Intel. Yes, that Intel – the chip company that’s been having about as much luck as a cat in a dog park lately.
Let’s be real for a second. Intel’s stock chart over the past decade looks like someone drew it with their non-dominant hand during an earthquake. While NVIDIA was busy becoming the golden child of AI and racking up 1,300% gains, Intel was… well, Intel was just kind of there, like that friend who peaked in high school.
The numbers are brutal. Intel went from earning $4.86 per share in 2021 to losing $0.13 per share last year. They’ve slashed 19,000 jobs, suspended their dividend, and their CEO basically rage-quit in December. Meanwhile, NVIDIA is over here making it rain with $203 billion in expected revenue and 46% earnings growth.
So why would Uncle Sam want to get cozy with Intel’s balance sheet? Two words: national security.
Here’s the thing – despite all its stumbles, Intel is still the only American company that can make advanced chips on U.S. soil at scale. And right now, we’re embarrassingly dependent on Taiwan for about 60% of the world’s semiconductors. That’s like keeping all your eggs in one basket… if that basket happened to be sitting 100 miles from your biggest rival who’s been making some pretty aggressive noises lately.
Commerce Secretary Howard Lutnick dropped $8.9 billion of CHIPS Act money to grab that 10% stake, plus secured a warrant for another 5% if Intel ever loses control of its foundry business. It’s basically the government saying, “We’re not letting you fail because we need you to succeed.”
And this isn’t a one-off thing. Remember MP Materials? The government backed them too – the only U.S. company mining rare earth minerals at scale. The stock doubled in a week after that news broke. Now they’re eyeing defense contractors like Lockheed Martin for potential equity stakes.
What we’re seeing is Washington moving from being the referee to actually suiting up and getting in the game. It’s industrial policy with actual skin in the game, not just strongly worded letters and subsidies.
For investors, this creates an interesting dynamic. When the government becomes your business partner, you’ve got the ultimate backstop. Sure, Intel’s got problems – their Ohio factory won’t be ready until 2030, and they’re still playing catch-up in the AI race. But now they’ve got Uncle Sam writing checks and making sure they don’t go under.
The bigger picture? This is just the beginning. The Trump administration has hinted at creating what some are calling a “MAGA Fund” – essentially America’s first sovereign wealth fund focused on strategic companies. We’re talking trillions of dollars potentially flowing into firms critical to national security.
So while Intel’s stock might still look like a roller coaster designed by someone with vertigo, having the U.S. government as a major shareholder changes the game entirely. Sometimes the best investment thesis isn’t about perfect financials – it’s about being too important to fail.