When the Trump administration dropped $8.9 billion on a nearly 10% stake in Intel last August, it was basically the government saying, “We’re betting big on American chips.” Fast forward to now, and that bet is looking *really* good. Like, $27 billion in paper gains good.
Here’s what happened: Intel crushed its Q1 earnings and gave guidance that made investors lose their minds. The stock rocketed 28% to an all-time high of $85.22, which means the government’s initial investment is now worth about $36 billion. That’s not a typo. That’s a $27 billion swing in less than a year.
To put this in perspective, Intel shares are up 118% year-to-date and have nearly tripled since the White House announced its investment. If you’re wondering whether this is a win for Trump’s “state-led capitalism” playbook, the answer is a resounding yes—and he’s definitely going to remind everyone about it.
The government also got warrants as part of the deal, which means it can buy an additional 5% of Intel’s stock at $20 per share. That’s basically a free option on more upside, which is a pretty sweet deal if you’re the U.S. Treasury.
Now, here’s where it gets interesting. This whole thing is a case study in what happens when the government decides to play venture capitalist with national security as the justification. Intel is critical to American semiconductor manufacturing, so the logic goes: invest in Intel, boost domestic chip production, and keep the U.S. competitive against China. It’s not crazy reasoning, but it’s also not how markets usually work.
Michael Brown, a strategist at Pepperstone, basically said Trump is going to milk this victory for all it’s worth. “We know how he loves to do a victory lap,” Brown told Business Insider. And honestly, he’s right. This is the kind of win that gets posted about at 6 a.m. on a Saturday.
But here’s the catch: when the government backs a company, that company might take more risks than it otherwise would. Why? Because they’ve got the president’s support. That’s not necessarily bad, but it’s worth keeping in mind. The White House is already using Intel’s success as proof that its “nimble and multifaceted policy approach” to semiconductor manufacturing is working. Translation: expect more government investments in companies deemed critical to national security.
The real question is whether this is a one-off win or the start of a trend. If Intel keeps crushing it, this becomes a template for future government investments. If Intel stumbles, well, that’s a different conversation entirely.
For now, though, the government is sitting on a massive unrealized gain, Intel is riding high, and Trump has a new talking point. Not bad for a $8.9 billion bet.
