TLDR
- Trump Administration secures 9.9% Intel stake through $8.9 billion CHIPS Act conversion
- SoftBank invests $2 billion at $23 per share, creating strategic Arm Holdings partnership
- Total government funding reaches $11.1 billion including previous CHIPS grants
- Intel stock trades at 1.1 price-to-book ratio, near liquidation value levels
- Company needs to double market cap from $107 billion to reach 2024 highs
Intel stock gained momentum after two major investment announcements that could reshape the struggling chipmaker’s future. The Trump Administration converted CHIPS Act funding into a direct 9.9% equity stake worth $8.9 billion.
The government purchased 433.3 million shares at $20.47 each. This deal combines $5.7 billion in remaining CHIPS Act grants with $3.2 billion from the Secure Enclave program.
Total federal investment now reaches $11.1 billion when including $2.2 billion in grants already received. The administration pledged not to seek board representation but will vote alongside current directors.
President Trump called the investment a “great Deal for America” in his announcement. He emphasized that the government “paid nothing” for shares now valued at approximately $11 billion.
SoftBank Partnership Creates Strategic Value
SoftBank separately agreed to invest over $2 billion in Intel stock at $23 per share. This gives the Japanese conglomerate slightly more than 2% ownership.
Many thanks to my dear friend Masayoshi Son for the confidence he has placed in me and Intel. @masason and I have worked closely together for decades, and I am pleased to share that @intel and @SoftBank Group have signed a $2 billion investment agreement. This is a major… pic.twitter.com/XOUPA1Bex5
— Lip-Bu Tan (@LipBuTan1) August 25, 2025
The timing follows previous discussions about SoftBank potentially acquiring Intel’s foundry division. Those talks pivoted to this equity investment instead.
SoftBank’s 90% stake in Arm Holdings creates interesting synergies. Arm designs and licenses CPU cores that could boost Intel’s struggling foundry operations.
Intel operates more U.S. chip foundries than any competitor. The company opened these facilities to third-party designers under former CEO Pat Gelsinger’s strategy.
Financial Position Shows Deep Discount
Intel’s current $107 billion market cap matches levels first reached in 1997. The stock trades at a 1.1 price-to-book ratio, suggesting minimal value above liquidation.
This represents a dramatic fall from Intel’s $200 billion valuation in early 2024. The stock must approximately double to return to those levels.
Intel plans $18 billion in capital expenditures for 2025 alone. The company continues heavy facility investments despite losing market share to Taiwan Semiconductor.
Taiwan Semiconductor pledged $165 billion for U.S. construction over several years. This highlights the massive competition Intel faces in contract manufacturing.
The foundry business has struggled to attract major customers despite billions in facility upgrades. The Arm partnership through SoftBank could change this dynamic.
Both investments signal growing confidence in Intel’s turnaround potential. The rock-bottom valuation limits downside risk for new investors at current prices.
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