Chip maker Intel (NASDAQ:INTC) is leading the race so far in securing billions of dollars under the CHIPS Act funding program. As per a Wall Street Journal report, Intel will use these funds to build large chip manufacturing facilities, designated as “secure enclave,” for U.S. defense and intelligence departments. The exact amount of the funding remains unknown at the moment, but people suggest that it could cost roughly $3 to $4 billion.
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The project could be set up within Intel’s existing facility in Arizona, sources said. The discussions are currently underway between Intel and the Commerce Department, National Intelligence, and Defense officials to finalize the deal.
The Biden Administration’s CHIPS Act passed last year, allocating $53 billion to the semiconductor industry. The need to allocate funds to the private chip sector stems from the government’s reluctance to be overly dependent on East Asian countries. The U.S. imports a massive amount of chips from Taiwan, a country that is under constant threat of attack from China. The program aims to boost domestic manufacturing and supply of high-end chips that could be used for military warfare, espionage, cyberwarfare, and defense capabilities.
Is Intel a Buy, Sell, or Hold?
Yesterday, Bernstein analyst Stacy Rasgon reiterated a Hold rating on INTC with a price target of $36 (5.1% downside potential).
Overall, on TipRanks, Intel has a Hold consensus rating based on four Buys, 19 Holds, and four Sell ratings. The average Intel price target of $36.87 implies 2.9% downside potential from current levels. Meanwhile, INTC stock has gained 44.8% so far this year.
