US Government Stake in Intel as an Anchor for Chip Foundry Viability

about 1 month ago

Michael Cembalest

"the US government equity investment in Intel. Intel is one of the stocks that's in our direct AI basket, but it is most certainly not part of the reason that AI stocks have performed well since chat GBT was launched. Intel earnings and Intel market cap have actually declined since Snow Pepper 2022. There are a lot of critics of this deal... But I'm not one of them. It's too late in the game to assume that somehow market forces are going to help support US domestic chip fabrication."

The commentary discusses the US government's 10% equity investment in Intel, which is positioned as a critical, albeit controversial, move to anchor demand for Intel's chip foundry. Despite a decline in Intel's earnings and market cap since late 2022, the analyst views the government stake as a necessary intervention given the limitations of relying solely on market forces to revitalize domestic chip fabrication.

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