Intel's shares rallied 28% this month, adding about $24 billion in market value amid reports of US government talks for a potential equity stake and a planned $2 billion investment from Japan's SoftBank. The surge pushed the company to trade at 53 times projected next-12-month earnings, the highest valuation since early 2002. Analysts warned the multiple prices in significant government-driven customer wins and labeled the stock expensive. The rally followed a July 24 earnings miss and public criticism of Tan by President Donald Trump, who later praised Tan after meeting him. Commerce Secretary Howard Lutnick said talks aim to convert Chips Act grants into non-voting equity; Intel declined comment and plans remain unsettled.
Shares of the struggling chipmaker have rallied 28% this month, adding about $24 billion in market value, on reports that the US government is in talks for a potential equity stake, as well as plans for a $2 billion investment from Japan's SoftBank Group Corp. The jump has Intel trading at 53 times profits projected over the next 12 months, the highest since early 2002, according to data compiled by Bloomberg.
The stock looks incredibly expensive here, said Wayne Kaufman, chief market analyst at Phoenix Financial Services. That kind of multiple is a bet that the government will push Intel so hard on customers that it becomes a winner. The surge in Intel this month followed a slump in the wake of a disappointing earnings report on July 24 and criticism of Tan earlier by President Donald Trump, who called for the CEO to step down, citing conflicts of interest.
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