Intel's stock increased by $12.72, or 10.5%, to $133.82 shortly after trading opened on Thursday, following a social media post by former President Trump. Trump announced that Intel would collaborate with Apple to design and manufacture chips in the United States. This news comes after a report in May by the Wall Street Journal indicated that Intel and Apple had reached a preliminary agreement for Intel to produce some chips for Apple, following more than a year of discussions.
Wedbush Securities analyst Dan Ives stated that this "preliminary deal to make chips for Apple" has been confirmed after over a year of negotiations. He emphasized that this represents a strategic move for Apple to further diversify its supply chain, reducing its reliance on Taiwan Semiconductor Manufacturing Company (TSMC), its primary overseas chip supplier. Apple has already been diversifying its manufacturing to other regions like Vietnam, India, and the U.S.
Former President Trump also highlighted the U.S. government's 10% stake in Intel, noting that Intel's valuation had climbed from approximately $100 billion in August to roughly $600 billion. He claimed the U.S. stake is now worth over $60 billion. The U.S. government is Intel's largest shareholder, surpassing institutional investors such as Vanguard and BlackRock, which hold about 6% each.
While Intel's shares climbed, neither Apple nor Intel immediately commented on Trump's announcement. Apple CEO Tim Cook had previously mentioned plans to raise product prices to offset increasing costs for memory and storage chips, driven by demand from AI companies. The potential deal for Intel to manufacture chips for Apple could also benefit Apple politically by enhancing its "made-in-America" production efforts.
