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Beleaguered Intel Corporation (Nasdaq: INTC) is seeing a rare stock rally, having gone up 12% over the month. The chip-making company closed 2024 at $20.05, now priced at $22.12 per share. A year ago, in January 2024, INTC stock was priced at $48.15, which seems like an unattainable dream at present.

Yet, is it really as unattainable as it seems after the departure of CEO Pat Gelsinger in early December? It remains the case that Intel represents a geostrategic asset for USG in the ever-important semiconductor arms race. 

Now that Donald Trump has resumed his 2nd term in office, perhaps a new play is in the works, as some rumors suggest.

Is Intel an Acquisition Target?

When companies are targeted for acquisition, their stock price typically goes up. This stands to reason as the purchase price is usually above the market price to entice shareholders. The acquisition premium then drives the price in market anticipation of future growth.

This dynamic appears to be in play for Intel after tech news site SemiAccurate reported of an email circulation hinting at an imminent Intel buyout.

“Last week we got confirmation, directly, from another highly placed source. This took SemiAccurate from about 60% confidence in the plan being real to more than 90%.”

On top of that rumor, in a now viral tweet, semiconductor researcher Dylan Patel from SemiAnalysis speculated that Elon Musk could either be involved in mediating Intel acquisition between GlobalFoundries (NASDAQ: GFS) or Qualcomm (NASDAQ: QCOM), or even pose as a potential buyer himself.

In his now-empowered position as DOGE (Department of Government Efficiency) advisor in the Trump admin, having sat behind Trump family members at the inauguration, Musk’s involvement could very well boost INTC stock. After all, both Tesla and SpaceX have pioneered their respective sectors under his leadership.

However, it is more likely that Elon Musk is a tech intermediary in potential Intel acquisition negotiations. What is certain is that it is exceedingly unlikely that Intel will be allowed to go under.

Intel as a Part of Big Tech Re-Alignment

After a certain value threshold, be it as human or financial capital, it is becoming increasingly clear that some companies no longer operate as regular businesses. This is why seeing Big Tech executives at political gatherings is so familiar. From Amazon and Microsoft to Alphabet and Meta Platforms, these companies cornered network effects.

In turn, they became integral parts of networked power that the government cannot ignore. Mark Zuckerberg confirmed this when he apologized for enacting mass censorship in collusion with the Biden admin. 

Likewise, Elon Musk released Twitter Files in December 2022 showed collusion between government officials to stifle various narratives. Elon Musk has also been a rising star in networked power on the back of government contracts for SpaceX and green subsidies for Tesla.

Equally so, Musk is in close alliance with Palantir and Anduril Industries as newly emerging defense contractors. Not only are the names of these companies derived from the same J.R.R. Tolkien mythology, but both are closely aligned with Israeli interests.

Self-described as “radical zionist”, Anduril founder Palmer Luckey not only shares his beliefs with Palantir CEO Alex Carp but he is also in alignment with OpenAI to “advance AI solutions for national security”. It also stands to reason that Musk’s acquisition of Twitter goes well with the need to establish a new social media influence network which can be fed into Palantir’s data analytics to bolster national security.

Caitlin Kalinowski at OpenAI succinctly made it clear that such infrastructure is needed to cover the US-Israel national security.

The positioning of Intel in this networked power will be critical given the need for semiconductor manufacturing outside China and precarious Taiwan. Intel has the expertise to power computing needs across the board – OpenAI, Palantir, X, Tesla, SpaceX and Anduril.

Moreover, Intel has a long and involved history of investments in Israel. Although the massive $25 billion expansion plan in Kiryat Gat was suspended across four foundry sites, Intel’s commitment will likely continue following successful military operations and Trump-brokered stabilization.

“Israel continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the region. As we’ve previously noted, the scope and pace of Intel’s manufacturing expansion at our sites around the world depends heavily on various factors.”

Intel spokesperson in June 2024

Given these factors, Intel should be viewed as too big/important to fail. President Trump consistently advocated for domestic industry revitalization. Although he was somewhat critical of the CHIPS Act that granted Intel $7.86 billion in direct funding, the reversal on TikTok points to a likely reversal on Intel as well. 

Whether that materializes in the form of expedited funding or mediated acquisition is another matter. What remains certain is that Intel is a vital cog in networked power and its valuation will reflect as much. 

Accordingly, we’ve likely seen INTC stock bottom this year. Over the last 52 weeks, the average INTC stock price was $29.56, significantly above its current price level. Notwithstanding the potential official acquisition news hitting the stock price, WSJ’s forecasting data points to the average INTC price of $24.29 per share.

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