Intel’s Stock Meltdown Risks Eroding Trump-Endorsed Comeback

Intel Corp.’s stock slide provides a reality check for President Donald Trump’s vision of quickly revitalizing domestic chip manufacturing led by an American champion, four months after the United States moved to buy up to a 10% stake in the company.

Although Chief Executive Lip-Bu Tan has managed to gain the president’s trust and maintain his own reputation in Washington, it is becoming increasingly difficult to turn his company around. Shares of Intel tumbled as much as 17.5% on Friday following weak forecasts that highlighted the company’s difficulty lining up major customers.

Just a few weeks ago, Trump praised the company’s progress and its “very successful” CEO while assessing early returns on U.S. investment. Tan struck a more serious tone when speaking to investors following the release of Intel’s quarterly results on Thursday.

“We are on a multi-year journey,” Tan said on a conference call with analysts. “It will take time and resolution, but my team and I are committed to rebuilding this iconic American company.”

Intel’s first-quarter estimates for revenue and earnings fell well short of Wall Street estimates. The company also announced that it still does not have a main customer for its state-of-the-art 14A process, but expects more solid decisions from buyers in the second half of the year or the first half of 2027.

Intel shares were down 17% as of 1:16 p.m. New York time, heading for the biggest one-day decline since 2024.

Tan acknowledged that returns to investors (the number of defect-free chips produced compared to total possible capacity) were below his expectations. This measurement is central to chip manufacturing; because lower yields are likely to negatively impact margins and deter potential customers for the foundry business, which produces chips for external customers in its manufacturing facilities.

“Clients are not going to be locked in unless they know they have a manufacturing process that can deliver,” JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, said in an interview on Bloomberg Television on Friday. “You have to know that if you commit to a particular production partner, the supply will be there. It’s a real chicken and egg problem.”

Since plans for the US to become one of Intel’s largest shareholders were revealed, shares of the Santa Clara, California-based company have more than doubled, with recent estimates showing huge gains. So far, the US owns 5.5 percent of Intel; The current value of this stake is approximately $12 billion, and the government also has options to acquire ownership of additional shares in the future.

White House spokesman Kush Desai said Trump “remains committed to restoring critical manufacturing and supporting American companies with a full policy package of tariffs, tax cuts and deregulation.” “The Trump administration’s equity stake in Intel specifically represents how we are investing in the long-term success of American technology and manufacturing.”

U.S. Department of Commerce spokespeople did not immediately respond to a request for comment.

Some analysts see U.S. investment in the company as an important pillar of the company’s long-term success. “This makes Intel’s factories a strategic asset for the U.S. military, and Intel has the full support of the U.S. government,” wrote Gus Richard, an analyst at Northland Securities. “Intel needs to transform its connections with the US government and its US military industrial base foundry business into broader business relationships.”

Although the success of Intel’s comeback won’t become clear for another few quarters, Taiwan Semiconductor Manufacturing Co. It already achieves what Intel aims for. This includes construction in the US, where TSMC plans to invest another $100 billion in Arizona as part of the Taiwan trade deal announced by the Trump administration last week. TSMC has pledged to bring 12 advanced manufacturing and packaging facilities to Arizona by the mid-2030s.

Under the Taiwan deal, companies investing in the US will receive exemptions from potential future chip tariffs to import 2.5 times their American capacity, making it less likely that the tariffs will make Intel’s products more attractive in the US market. Still, TSMC’s decision to continue manufacturing in Arizona points to a positive long-term trend for Intel: continued growth in demand for AI chips.

Intel has started shipping 18A chips under 2 nanometers, which is a generation behind 14A, to customers from its production facilities in Arizona and Oregon. The company’s Chips Act-sponsored investment in Ohio has been repeatedly delayed, and the company avoided any mention of it on Thursday’s investor call. The more than $28 billion project was supposed to produce chips last year, but Intel no longer expects to be operational until 2030.

With assistance from Ian King, Ed Ludlow and Caroline Hyde.

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