Government Discussions Fuel Intel Stock Surge
Intel Corp INTC stock is trading higher Tuesday amid reports of the chip designer being in discussions with the U.S. government to secure a substantial sum under the U.S. Chips Act, striving to ride the wave of artificial intelligence craze.
The company stands to potentially gain over $10 billion in loans and direct grants, thanks to the 2022 Chips Act, which has set aside $39 billion in direct grants, loans, and guarantees worth $75 billion, aimed at bolstering the U.S.’s position in semiconductor technology.
Expanding Horizons
In furthering its reach, Intel also reportedly seeks to raise at least $2 billion in equity to fund the construction of a semiconductor fabrication plant in Ireland. Additionally, it has set its sights on a manufacturing expansion, with Brookfield Infrastructure Partners pledging up to $15 billion for a 49% stake in Intel’s Ocotillo campus in Chandler, Arizona.
The company’s focus on the burgeoning AI PC market is evident through its dedication to AI processing in individual devices.
Analysts’ Projections and Market Response
Intel analysts projected a first-quarter miss with $13.5 billion in sales, an 11% sequential decrease, falling short of the consensus decline of 6% sequentially, attributed to various headwinds, including cuts in Mobileye outlook, PC seasonality, weak industrial/auto sector, networking, and muted enterprise demand.
The company’s stock was up by 0.75% at $43.84 at the latest check on Tuesday.
Meanwhile, GlobalFoundries Inc GFS secured $1.5 billion in grants under the U.S. Chips Act.
The enthusing developments in the semiconductor industry come at a time when companies are striving to harness the potential of artificial intelligence, which is increasingly becoming a mainstay in modern technological advancements.
