Key Points in This Article:
-
Intel’s (INTC) stock is gaining traction due to a potential 10% U.S. government stake via CHIPS Act grant conversions.
-
SoftBank is investing $2 billion at $23 per share into the chipmaker, reflecting confidence in Intel’s AI and manufacturing potential.
-
After years of underperformance, Intel is now a focal point for investors seeking AI growth stocks.
-
Nvidia made early investors rich, but there is a new class of ‘Next Nvidia Stocks’ that could be even better. Click here to learn more.
Shining a Spotlight on Intel
Intel (NASDAQ:INTC) has emerged from the shadows of its semiconductor rivals, capturing the attention of investors and policymakers alike. After years of struggling to keep pace with competitors like Nvidia (NASDAQ:NVDA) and Taiwan Semiconductor Manufacturing (NYSE:TSM), Intel is now at the center of a flurry of investment interest.
Over the weekend, Bloomberg reported that the U.S. government is
With Intel’s stock surging and a renewed focus on its role in AI and national security, the question arises: Is INTC the new, hot AI growth stock to buy now?
Why Intel Is Suddenly a Hot Commodity
Intel’s resurgence is tied to its strategic importance in the U.S. push for semiconductor self-sufficiency. The CHIPS and Science Act, allocating $52.7 billion to boost domestic chip manufacturing, has already funneled $8.5 billion to Intel for its Ohio and Arizona facilities.
The potential conversion of up to $10.9 billion in grants into a 10% equity stake underscores Intel’s role as a “national champion” in reducing reliance on Asian foundries like TSM, even as it also invests in U.S. facilities.
This government backing not only provides financial stability but also positions Intel as a linchpin in national security and AI infrastructure.
SoftBank’s Strategic Bet
SoftBank’s $2 billion investment, acquiring a 2% stake, is a vote of confidence in Intel’s IDM 2.0 strategy, which emphasizes advanced manufacturing and foundry services. CEO Masayoshi Son’s move aligns with SoftBank’s broader AI ambitions, including its $500 billion Stargate AI data center project.
By investing in Intel, SoftBank is betting on the chipmaker’s 18A process node and AI-focused chips like the Xeon 6 and Gaudi 3, which aim to capture market share in the booming AI sector. This partnership signals Intel’s potential to become a key player in AI-driven growth.
AI Roadmap and Strategic Partnerships
Intel’s partnerships with Amazon‘s (NASDAQ:AMZN) AWS and the U.S. Department of Defense, including a custom Xeon 6 chip and secure enclave program, position it to capitalize on the projected $250 billion in AI-related chip investments in 2025.
Innovations like glass substrates for advanced packaging, enabling 1 trillion transistors by 2030, further enhance Intel’s AI credentials. Despite a $18.8 billion loss in 2024, these developments suggest Intel is pivoting toward high-growth areas, making it an attractive prospect for investors.
Not Smooth Sailing
Intel’s turnaround is not without hurdles. The company faces fierce competition from TSM, Nvidia, and Advanced Micro Devices (NASDAQ:AMD), and its foundry business has yet to secure major external clients. Delays in its Ohio facility and a history of operational challenges raise concerns about execution.
Additionally, government involvement could introduce regulatory risks and dilute corporate autonomy, potentially impacting investor confidence.
Key Takeaway
Intel’s stock presents a compelling opportunity for investors with a high-risk tolerance, driven by its strategic alignment with U.S. industrial policy and AI growth potential. The SoftBank investment and potential government stake signal strong external support, but Intel’s ability to execute its 18A node and secure foundry contracts will determine its long-term success.
A government-owned Intel could stabilize the company but risks political interference, potentially affecting innovation and market agility, if not in the current administration, certanly from future ones.
The post Is Intel the Hot AI Growth Stock to Buy Now? appeared first on 24/7 Wall St..
