SouthernWorldwide.com – Intel’s stock experienced a significant surge on Thursday following President Trump’s announcement on social media. He stated that the semiconductor giant is collaborating with Apple to design and manufacture chips within the United States.
The market responded positively, with Intel’s shares climbing $12.72, representing a 10.5% increase. The stock reached $133.82 shortly after the trading day commenced.
This announcement from President Trump regarding Intel follows a previous development last August. At that time, he facilitated a deal for the U.S. government to acquire a 10% stake in the chipmaker. This move had sparked concerns about potential conflicts of interest, given Intel’s existing business relationships with the government and the possibility that the deal could unfairly benefit Intel over its competitors.
The Cato Institute, a nonpartisan think tank, had described the arrangement as an “unprecedented government ownership of private enterprise” at the time of the announcement.
On Thursday, President Trump also emphasized the substantial increase in value of the government’s stake. He noted that Intel’s valuation has grown from approximately $100 billion in August to around $600 billion currently.
“Nine months, and they’ve increased in value over HALF A TRILLION DOLLARS!” Mr. Trump posted. “America’s stake is now over 60 billion dollars.”
With its 10% ownership, the U.S. government is now the largest shareholder in Intel. This position surpasses institutional investors like Vanguard and BlackRock, which are Intel’s second and third-largest investors, each holding approximately 6% of the company’s stock, according to data from FactSet.
Wedbush Securities analyst Dan Ives commented on the potential implications of this partnership in a research note. He suggested that working with Intel could enable Apple to diversify its manufacturing operations. This would reduce its reliance on Taiwan Semiconductor Manufacturing Company (TSMC), which is currently its primary overseas chip supplier.
“This preliminary deal to make chips for Apple comes after more than a year of negotiations, with the Trump post now confirming a deal is now in place,” Ives wrote.
He further elaborated, “While Apple has diversified its supply chain to other parts of the world, including Vietnam, India and the U.S., this represents a strategic move by Apple to continue diversifying its supply chain to reduce pressure across its manufacturing footprint.”
In related news, Apple CEO Tim Cook indicated that the company intends to raise prices on its products. This measure is intended to offset the increasing costs of memory and storage chips. The Wall Street Journal reported on Wednesday that these costs have been rising due to heightened demand from artificial intelligence companies.
