Intel shares leap after Trump says it’s working with Apple to make chips in the U.S.

Intel Shares Soar Following Trump's Announcement of U.S.-Based Chip Collaboration with Apple

Intel shares leap after Trump says - On Thursday, shares of Intel experienced a significant surge following a statement from President Donald Trump, who claimed on social media that the semiconductor company is collaborating with Apple to design and manufacture chips within the United States. The stock price climbed sharply, rising $12.72, or 10.5%, to $133.82 shortly after the market opened. This unexpected boost in value came as a direct response to Trump's remarks, which hinted at a strategic partnership between the two tech giants.

Intel’s stock movement was particularly notable given the broader context of its recent financial performance. The company’s valuation has seen a dramatic increase, jumping from approximately $100 billion in August to around $600 billion currently. Trump highlighted this growth in a tweet, emphasizing the rapid rise in Intel’s worth. “Nine months, and they’ve increased in value over HALF A TRILLION DOLLARS!” he wrote, adding, “America’s stake is now over 60 billion dollars.”

The U.S. government’s stake in Intel, which was established in a deal brokered by Trump last August, has also played a pivotal role in the company’s recent success. The agreement granted the federal government a 10% ownership share, making it the largest single shareholder of the chipmaker. This stake, however, has raised concerns about potential conflicts of interest, especially since Intel continues to operate with other government entities and the deal could provide the company with a competitive edge over rivals.

“This arrangement represents an unprecedented government ownership of private enterprise,” noted the Cato Institute, a nonpartisan think tank, at the time of the deal’s announcement. The institute’s critique underscored the significance of the U.S. investment, which has now grown to over $60 billion, according to recent data.

According to FactSet, the government’s 10% stake has outpaced institutional investors such as Vanguard and BlackRock, which hold about 6% each. This shift in ownership highlights the growing influence of public investment in Intel’s operations. Analysts suggest that the collaboration with Apple could be a strategic move to strengthen the U.S. semiconductor industry, which has long been reliant on foreign manufacturing.

Apple, while not immediately commenting on the potential agreement, is reportedly poised to benefit from this partnership. The move could help the tech giant diversify its manufacturing base and reduce its dependence on Taiwan Semiconductor Manufacturing Company (TSMC), its primary overseas chip supplier. Dan Ives, a research analyst at Wedbush Securities, stated in a note that the deal marks a critical step in Apple’s efforts to expand its supply chain across multiple regions. “This preliminary agreement to produce chips for Apple comes after more than a year of negotiations, with Trump’s post now confirming the deal is finalized,” Ives explained.

Ives further elaborated that Apple’s strategy of diversifying its supply chain is gaining momentum. The company has already established manufacturing operations in Vietnam, India, and the U.S., but this collaboration with Intel could accelerate the process. “By expanding its domestic manufacturing presence, Apple aims to mitigate risks associated with global supply chain disruptions and create a more resilient production network,” he added.

Trump’s advocacy for domestic chip production has been a consistent theme in his economic policy. His recent emphasis on Intel’s valuation growth aligns with broader goals of revitalizing American manufacturing. The president’s comments come amid growing pressure on tech companies to reduce reliance on foreign supply chains, particularly in light of global trade tensions and the push for self-sufficiency in critical industries.

The potential partnership between Apple and Intel also reflects a shift in the competitive landscape of the semiconductor sector. As TSMC continues to dominate the market with its advanced manufacturing capabilities, Apple’s decision to partner with Intel could introduce new dynamics in the industry. This collaboration might allow Apple to secure more favorable terms for chip production, while Intel gains access to Apple’s vast resources and market reach.

Tim Cook, Apple’s CEO, recently addressed the company’s financial strategy, stating that it plans to increase product prices to counterbalance rising costs for memory and storage chips. These chips, which have become more expensive due to increased demand from AI companies, are a key component in Apple’s devices. The Wall Street Journal reported this development, suggesting that the company is preparing for a new era of pricing adjustments to maintain profitability amid supply chain pressures.

Analysts believe that the combination of Apple’s market power and Intel’s manufacturing expertise could lead to groundbreaking innovations in chip technology. This partnership may also serve as a model for other tech firms looking to bolster their domestic production capabilities. “The synergy between Apple and Intel could drive advancements in both design and production, setting a new standard for U.S. tech leadership,” said one industry expert.

However, the deal is not without its challenges. While the government’s stake has provided Intel with financial stability, it has also sparked debates about the balance between public and private interests. Critics argue that the stake might influence Intel’s business decisions, potentially favoring government-aligned strategies over purely market-driven ones. Despite these concerns, the partnership appears to be gaining traction as both companies work toward common goals.

As the semiconductor industry continues to evolve, the collaboration between Apple and Intel could have far-reaching implications. With the U.S. seeking to reclaim its position as a global leader in chip manufacturing, this deal may serve as a catalyst for renewed investment and innovation. The combined efforts of these two industry titans could not only reshape their own operations but also influence the broader tech ecosystem, paving the way for a more self-reliant and competitive American manufacturing sector.