Following a robust first-quarter earnings report, the U.S. government has seen its Intel (INTC) shares surge over 22% in pre-market trading on Friday, resulting in an unrealized gain of approximately $26.5 billion. This rise comes from a strategic move by the Trump administration in August when it exchanged $8.9 billion in CHIPS Act grants and Secure Enclave funding for 433.3 million Intel shares at $20.47 each. This transaction granted the government roughly a 9.9% ownership stake in Intel, which is now valued near $81.80 per share, pushing its valuation to approximately $35.4 billion—almost triple its worth within a year.
In addition, the government possesses warrants for acquiring an extra 5% stake at $20 per share, options currently deeply in-the-money due to the stock’s surge.
Intel’s significant rally was propelled by surpassing Wall Street’s expectations with first-quarter revenue of $13.6 billion—a 7% increase from the previous year and beyond forecasts of $12.4 billion. The company also reported non-GAAP earnings per share at $0.29, greatly exceeding the anticipated loss of $0.01.
The growth was primarily driven by a 22% rise in Intel’s Data Center and AI segment to $5.1 billion, spurred by increased demand for Xeon processors amid broader AI infrastructure expansion.
Intel’s CEO Lip-Bu Tan highlighted the transition in AI computing towards inference and agentic workloads, noting this trend significantly boosts the need for Intel’s CPUs. For the second quarter, Intel forecasts revenues between $13.8 billion and $14.8 billion.