A second Trump presidential term has not yet started, but already, projections are going for chip stock Intel (INTC). The news, however, appears to be something of a mixed bag. Though investors do not seem particularly troubled by this, as they piled in on Intel shares, sending the share price up nearly 5% in Thursday afternoon’s trading.
The bad news for Intel is that Trump is very, very much opposed to the CHIPS and Science Act. We found as much out yesterday when we got word of concerns about the Battlemage graphics line and its subsequent models to follow. A Business Insider report, meanwhile, took a closer look at the impact of Trump on Intel. With a Republican House, Senate and Presidency increasingly likely, the idea that the CHIPS Act could be repealed altogether would mean a serious blow to Intel, who is still waiting on funding from same to arrive.
However, there is a distinct plus for Intel with Trump, noted the report. Trump is very, very much in favor of domestic manufacturing. Intel’s project to improve chip production on American soil will likely not go unnoticed, or unrewarded, 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 do exactly the kind of thing that Trump wanted to do all along.
Gelsinger: Please Don’t Forget We Sell Stuff to TSMC
A recent Tom’s Hardware report, meanwhile, suggests that 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 (TSM) with chipmaking hardware. So even as Intel makes sales to TSMC, it also buys things from them. We all remember what happened when Gelsinger’s remarks about TSMC cost Intel a huge discount.
Finally, a report from Digital Trends suggests 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.” While Intel performed well in some segments, the gap between the two proved oddly narrow in some respects. Given that Intel’s chip is supposed to be a “flagship chip”, with the hefty price tag that entails, merely being slightly ahead on some fronts may be a problem for Intel going forward.
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.
