What Happened?
Shares of computer processor maker Intel (NASDAQ:INTC) jumped 12.2% in the morning session after Japanese tech conglomerate SoftBank Group announced a $2 billion investment in the company.
The Japanese technology investor will acquire shares at $23 each, representing a stake of just under 2% in the U.S. chipmaker. This move is being interpreted by investors as a significant "vote of confidence" in Intel's long-term transformation efforts as it navigates a period of losses and competitive pressure. SoftBank CEO Masayoshi Son stated the investment reflects a belief that "advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role." Adding to the positive sentiment are reports that the U.S. government is also considering taking a stake in the company, potentially making it the largest shareholder. This combination of major private investment and potential government backing has created a wave of optimism around the chipmaker's turnaround prospects.
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What Is The Market Telling Us
Intel’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. But moves this big are rare even for Intel and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 3.5% on the news that reports revealed the Trump administration is considering taking a stake in the company. The potential investment, which could be funded through the U.S. Chips Act, is reportedly intended to support the development of Intel's factory hub in Ohio, according to Bloomberg. News of the talks follows a recent meeting between President Trump and Intel CEO Lip-Bu Tan. Analysts suggest that direct federal backing could serve as a lifeline for the struggling chipmaker as it works to revive its business. A government stake could also bolster U.S. semiconductor leadership and national security by supporting domestic production and reducing reliance on foreign manufacturers.
Intel is up 25% since the beginning of the year, and at $25.28 per share, it is trading close to its 52-week high of $27.39 from February 2025. Investors who bought $1,000 worth of Intel’s shares 5 years ago would now be looking at an investment worth $522.97.
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