Now that the election results are in and Donald Trump has been named president-elect, it’s time to think about what a new administration in Washington DC might look like. Since Trump was already president between 2016 and 2020, investors have at least some idea of what to expect in terms of policy change.
Below I will explain why I see it Intel (NASDAQ: INTC) is emerging as a major winner under the incoming Trump administration.
Start your morning smarter! Wake up with Breakfast news in your inbox every market day. Register for free »
Intel and the CHIPS Act
One of the biggest initiatives under the Biden-Harris administration was the CHIPS and Science Act. At its core, the law achieves two goals: increasing investment in domestic technology research and strengthening U.S. semiconductor manufacturing capabilities in an effort to compete more fiercely with players abroad.
Since the CHIPS Act was signed into law in 2022, Intel has won a number of government contracts worth billions of dollars. With Trump coming to the White House in January, I think Intel’s relationship with the federal government will become much stronger.
Image source: Getty Images.
How a Trump White House Could Benefit Intel
During his campaign, President-elect Trump has repeatedly touted one economic concept: tariffs. Trump’s goal with tariffs is not just to generate more domestic tax revenue. Instead, his administration will try to use tariffs as a form of leverage when it comes to foreign trade policy.
Here’s how tariffs on imports from abroad could become a major catalyst for Intel:
1. Government contracts: Given that Trump is likely to favor American manufacturing and companies over competitors from abroad, I wouldn’t be surprised if Intel were to receive further contracts under the CHIPS Act. Furthermore, imposing tariffs on foreign-made semiconductors bodes well for Intel, as the company has a unique opportunity to charge more competitive prices for its domestically made products. In turn, chip demand could shift from greater dependence on foreign countries in favor of U.S. manufacturers such as Intel.
2. Artificial Intelligence (AI) and the Military: One of the most under-the-radar opportunities in the AI landscape has to do with how military agencies are leveraging the technology. AI is a multi-billion dollar opportunity for the defense sector, and I think Intel has the opportunity to play a major role here.
It’s no secret that security is becoming an increasingly important topic in supply chain logistics, especially when key pieces of technology originate from outside the US. If the new Trump administration imposes stricter protocols regarding defense technology, Intel could serve as a crucial player in security. , American infrastructure.
Are Intel Stocks a Buy?
To be fair, Intel has had a tough time in 2024. The company is lagging behind the competition, viz Taiwanese semiconductor manufacturing — and a less-than-stellar review of it Broadcom regarding Intel’s Foundry technology doesn’t exactly present a daunting opportunity. Oh, and then there’s the fact that Intel just got replaced in the Dow Jones Industrial Average of all companies, Nvidia.
INTC chart
With shares down nearly 50% year to date, Intel stock and its business in general appear to be in freefall as of this writing.
However, I’m cautiously optimistic that Intel could be a lucrative turnaround, given its already close alliance with the federal government and Trump’s vision to prioritize domestic manufacturing.
For now, I think a wise strategy is to sit on the sidelines and wait for Trump to be sworn in in January. Once that happens, investors will get a clearer picture of what his cabinet will look like and how his policy agenda evolves. Investors, in turn, should be better able to determine whether there are new benefits for Intel.
Don’t miss this second chance at a potentially lucrative opportunity
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
-
Amazon: If you had invested $1,000 when we doubled in 2010, you would have $23,529!*
-
Apple: If you had invested $1,000 when we doubled in 2008, you would have $42,465!*
-
Netflix: If you had invested $1,000 when we doubled in 2004, you would have $441,949!*
We’re currently issuing ‘Double Down’ warnings for three incredible companies, and another opportunity like this may not happen anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns November 11, 2024
Adam Spatacco has positions at Nvidia. The Motley Fool holds positions in and recommends Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.
Meet the 1 artificial intelligence (AI) chip stock I think is poised for a big run under the Trump administration (hint: it’s not Nvidia) was originally published by The Motley Fool
