A second Trump presidential term has not yet started, but already projections are going for chip stock Intel (INTC).
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The bad news for Intel is that Trump is very opposed to the CHIPS Act. We found as much out yesterday when we got word of concerns about the Battlemage graphics line and its subsequent models to follow. With a Republican House, Senate, and presidency increasingly likely, the idea that the CHIPS Act could be repealed altogether would mean a serious blow to Intel, who is still waiting on funding to arrive.
However, there is a distinct plus for Intel with Trump as he is very much in favor of domestic manufacturing. Intel’s project to improve chip production on American soil will likely not go unnoticed by a Trump administration. The CHIPS Act may get pulled, but it is a safe bet that Intel will see some kind of government help as it seeks to increase production in the U.S.
Selling Stuff to TSMC
Separately, Intel might be getting a touch desperate to keep investors in the fold. CEO Pat Gelsinger, during a recent interview, hastened to remind investors that Intel provides Taiwan Semiconductor Manufacturing Co. (TSM) with chipmaking hardware. We all remember what happened when Gelsinger’s remarks about TSMC cost Intel a huge discount.
Finally, more problems may be in the offing as a recent head-to-head test between the Intel Ultra 9 285K and the AMD (AMD) Ryzen 7 9800X3D processors proved to be “not even close.”
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 22 Holds and seven Sells assigned in the past three months, as indicated by the graphic below. After a 29.86% loss in its share price over the past year, the average INTC price target of $24.43 per share implies 7.07% downside risk.
