Seventy-one percent of respondents to a Stocktwits poll believe the deal will happen.
Intel Corp. (INTC) extended gains after the closing bell on Thursday, driven by a report that the U.S. government is in talks to pick up a stake in the struggling chipmaker.
Bloomberg reported, citing people familiar with the plans, that President Donald Trump’s administration and Intel are in talks for a potential deal, following a meeting between Trump and Intel CEO Lip-Bu Tan earlier this week.
The development comes days after Trump sought the ouster of Tan, calling him “highly conflicted”. The attack came after Republican Sen. Tom Cotton sent a letter to Intel Chairman Frank Yeary expressing concern over Tan’s investments and ties to semiconductor firms that are reportedly linked to the Chinese Communist Party.
Intel shares rose 7.4% in Thursday’s session, and gained a further 4% in after-hours. On Stocktwits, the retail sentiment shifted a few notches higher in the ‘extremely bullish’ territory (96/100) as of late Thursday, while 24-hour message volume rose over 200%.
Seventy-one percent of over 2,000 users who responded to a Stocktwits poll believe the U.S. government will acquire stake.
“The stage is set — just waiting for that trigger to be pulled,” a user said, anticipating the deal.
Intel has fallen well behind rivals in recent years, hampered by sluggish progress in artificial intelligence chip development, where Nvidia has seized a commanding lead, and persistent challenges in its foundry operations.
As most chip designers outsource manufacturing to companies like Taiwan Semiconductor Manufacturing Co. (TSM), Intel has invested in its own manufacturing business, which has failed to take off, and rumors have swirled for years that Intel might sell it.
More recently, Intel has been squarely focused on cutting costs. Last month, it announced plans to lay off 15% of its workforce and further reduce headcount through attrition by the end of the year. It trimmed a similar percentage of roles last year.
Investment from the U.S. government would shore up Intel’s finances and catalyze its planned factory hub in Ohio, according to Bloomberg. The company had once promised to turn that site into the world’s largest chip-making facility, though it has been repeatedly delayed.
Tan’s predecessor, Pat Gelsinger, touted the Ohio factory expansion as part of a comeback plan.
The government’s involvement is not exactly unprecedented. The Trump administration recently took a so-called golden share in United States Steel Corp. as part of a deal to clear its sale to a Japanese rival.
Additionally, the Defense Department announced last month that it will take a $400 million preferred equity stake in rare-earth producer MP Materials Corp., a deal that would make the U.S. government the company’s largest shareholder.
Intel’s stock is up about 19% this year.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<