Intel Shares Rise on Potential Major Funding from U.S. Chips Act

On Tuesday, Intel Corp's stock (NASDAQ:INTC) saw an uptick due to reports that the semiconductor giant is in negotiations with the U.S. government to secure a substantial financial package. This move is aligned with Intel's intent to delve deeper into the burgeoning artificial intelligence (AI) segment.

Massive Funding Under The U.S. Chips Act

Intel is reported to be on the verge of clinching over $10 billion in a mix of loans and direct grants under the legislative umbrella of the 2022 U.S. Chips Act. This Act laid out $39 billion for direct grants in addition to loans and guarantees totaling $75 billion, with the goal of bolstering the United States' semiconductor fabrication capabilities.

Global Expansion and Strategic Focus

Intel has been strategically aligning its business for growth, with previous news indicating plans to raise at least $2 billion in equity for a semiconductor factory in Ireland. Additionally, it has garnered a significant investment from Brookfield Infrastructure Partners, willing to commit as much as $15 billion for a near-half stake in Intel's manufacturing expansion at its Arizona location.

The company is positioning itself to capitalize on the emerging AI PC market, focusing on bringing AI processing capabilities to individual devices for enhanced performance.

Current Financial Outlook and Comparisons

Despite the promising news, Intel's financial analysts have foreseen a lower-than-expected performance for the first quarter, anticipating $13.5 billion in sales, a decrease from previous figures.

Comparatively, GlobalFoundries Inc (NASDAQ:GFS) also secured a slice of the Chips Act funding, receiving $1.5 billion in grants.

Intel's Stock Performance

Reflecting investors' reaction to the funding reports, Intel's stock experienced a modest increase of 0.75%, hitting $43.84 per share.

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