Intel Corporation (NASDAQ:INTC) surged in after-hours trading after SoftBank Group (OTC:SFTBF) (OTC:SFTBY) agreed to inject $2 billion into the chipmaker amid reports that the Donald Trump administration is weighing a 10% stake in the company.
SoftBank Steps In With $2 Billion Bet
On Monday, it was announced that Softbank will invest $2 billion in Intel through a primary issuance of common stock, paying $23 per share.
The deal would give the Japanese investment giant just under a 2% equity stake, making it Intel's sixth-largest shareholder, according to LSEG data, noted Reuters.
The move underscores SoftBank's aggressive investment streak in 2025, which also includes a $30 billion commitment to OpenAI and backing for Stargate, a $500 billion U.S. data center project.
Intel shares closed down 3.66% during regular trading but jumped 5.37% in after-hours following the announcement, Benzinga Pro data show.
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US Considers National Security Stake
Earlier in the day, Bloomberg reported that the U.S. government is in talks to acquire up to a 10% stake in Intel.
The speculation comes after President Trump demanded the resignation of Intel CEO Lip-Bu Tan over alleged ties to Chinese firms. Trump later softened his stance after a White House meeting with Tan, when he said, "His success and rise is an amazing story."
Tim Seymour of Seymour Asset Management previously cautioned that nationalizing a company is not conventional and has historically sparked sell-offs, but acknowledged the political and strategic backdrop for such a move.
Intel's Struggles Deepen Amid Mounting Competition
The developments come as Intel grapples with mounting challenges.
The company reported an $18.8 billion loss in its foundry business in 2024 despite $8.5 billion in U.S. subsidies.
Fitch Ratings has downgraded Intel's credit, citing leadership instability, delays in its Ohio fabrication project--now pushed into the 2030s--and weak profitability in its manufacturing pivot.
"Intel’s balance sheet is not good. A stake could go a long way toward finishing what Gelsinger couldn’t afford to build but did it anyway," CNBC's Jim Cramer said.
The company's 18A process technology has faced yield issues, leaving Intel behind rivals such as Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), Advanced Micro Devices Inc. (NASDAQ:AMD) and Arm Holdings, Inc. (NASDAQ:ARM) in the race for advanced chips and AI readiness.
Intel's Investor Outlook
Despite the turmoil, Intel shares are up 17.01% year-to-date, outpacing the Nasdaq 100's 13.05% gain.
The company currently holds a consensus price target of $23.77, derived from the opinions of 33 analysts. The three latest analyst updates issued by JP Morgan, Rosenblatt and Loop Capital provided an average price target of $20, suggesting a potential 19.78% downside for Intel.
Benzinga’s Edge Stock Rankings indicate that Intel has sustained positive momentum across short, medium and long-term timeframes. More performance insights can be found here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
