00:00 Brian Sozzi
All right, let’s fire up, uh, my stock of the day. The Trump administration is reportedly in talks with Intel to have the US government take a stake. Uh, Intel declined to comment specifically on this to me, but they did say this, uh, quote, Intel’s deeply committed to supporting President Trump’s efforts to strengthen US technology and manufacturing leadership. Uh, the questions here are many though. One, why would the administration even want to stake in an Intel that is scary behind chief rivals Nvidia and AMD? President Trump has interacted a lot with Nvidia CEO Jensen Huang and has got a taste as to what it means to be a leader in semiconductors. Two, why would Intel want to get in bed with the government at a time in which CEO Lipu Tang and the board must act quickly to reorganize the company. I find it hard to believe the government will be a quiet minority shareholder. There’s a lot of stake here, as Intel is and should be a beacon of US chip making, not the punching bag it has become. The company’s financials have taken a major hit with sales down for more than three straight years and earnings evaporating in the process. A lot going on there. Still with me, my round table, Kenny, Paul Kerry, uh, Slate Stone Wealth chief market strategist, David Seif, Nomora chief economist, and Yahoo Finance reporter, senior reporter, Allie Canal. Kenny, I want to go over to you. Um, any interest in going long in Intel on news like this, uh, even in the, uh, keeping the back of your mind, or maybe just putting the front of your mind that this is a fundamentally, uh, just wrong company. I mean, nothing’s going right for them.
03:00 Kenny Polcari
Uh, uh, agree. So Intel’s not a name that I’ve ever owned, uh, and we don’t own it here. But look, I it’s certainly has a pop because of the news. But is the pop temporary? I’m not even sure. And I agree with you. Why would you want to get, why would the government want to now be partners with Intel? Why would Intel want to be partners with the government? And what does that say about future opportunities? Is the government now going to start this Trump going to start the stick his hand in other companies?
03:41 Brian Sozzi
Kenny, it’s like the auto bailout. I mean, it reminds me of when they took a stake in GM, what, 15, 20 years ago.
03:50 Kenny Polcari
100%. And so I’m a little bit I’m a little bit confused about that. But Intel’s not a name that I ever owned at all. I think there’s other places to put your money in the space. But so this news does nothing in terms of getting me excited about, oh, I got to jump on this Intel bandwagon. I do not.
04:18 Brian Sozzi
David, does the, does it benefit, um, the US economy to have a healthy Intel? Or at this point, the semiconductor industry led by Nvidia, AMD, and of course, Taiwan semiconductor, they have just passed this company by, and our economy can go chugging along relying on chips from these three companies.
04:55 David Seef
Yeah, I mean, you know, I don’t have much to say about individual companies, but certainly, um, you know, the US has a multi-century track record of doing well by sort of not sticking its nose into things and allowing, allowing the private market to go where it may. Um, to the extent that Intel has been lagging behind, uh, it it may be the best thing for the economy to simply allow it to, uh, continue to either wither or sink or swim, so to speak, um, and allow the current leaders to continue to lead and only lose their lead if they actually get out competed.
05:52 Brian Sozzi
Uh, Allie, uh, we’re just about almost two weeks away from that Nvidia earnings report. And it will look starkly different to what Intel put up a few weeks ago. And it’s night and day. I mean, these are, these companies both might be making computer chips, but they couldn’t be more different.
06:22 Allie Canal
Couldn’t be more different. And Intel, I just feel like it’s too late for the company to really catch up to AMD, to Nvidia. Of course, for the Trump administration, they’re viewing this as an issue of national security, that they really want to make sure that Intel can survive through this volatile time. We did have the that CEO meeting with President Trump, and really we’ve seen that across the board of big tech, right? Apple CEO, Tim Cook, met with Trump recently. And then out of that meeting was a $100 billion investment in the US. So that is President Trump’s goal. He wants to bring manufacturing production, all the things, including all the chip makers back onto the domestic soil. But they also have other types of agreements that they’re rolling out that are very unique and really unprecedented. One of those being that revenue share agreement with Nvidia and AMD. They’re letting them sell some of their chips to China for a kickback, for some of the revenue to the federal government. So there’s just a lot of moving parts and moving pieces to this. It’s still an unconfirmed report. Intel did say that they are looking forward to working with the government, but they didn’t confirm whether or not this was actually happening. So it feels like the US is just going to continue to be involved in some of these companies, at least throughout the term of Trump’s presidency. What ultimately comes from that and the legacy that leads and how it really changes what we view the the chip supply chain as at this current moment, that remains to be seen.
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