Intel (NASDAQ: INTC) The stock lost ground in Tuesday’s trading. The company’s share price ended the daily session down 3.3%. Meanwhile, the S&P500 index and the Nasdaq Composite index ended the day 0.5% and 0.6% higher, respectively.
Shares of Intel fell today after it was revealed that the company had received just $7.9 billion in direct funding through the CHIPS Act. Previously, the company was on track to receive an $8.5 billion grant.
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Intel shares gained ground yesterday after it was announced that the federal funding distribution through the CHIPS Act had been completed. But in an announcement it published today, the semiconductor company revealed that it had received just $7.9 billion in funding through the legislation – less than the $8.5 billion in direct funding previously outlined. The chip giant was also on track to receive up to $11 billion in additional loans through the CHIPS Act, and it remains to be seen what happens with that funding.
In response to the news, Citi published a new research note on Intel stock. The company noted that it believed performance issues at the business and delayed construction of the semiconductor plant had led to the funding shortfall.
While Citi analysts believe Intel is ready to match Taiwanese semiconductor manufacturing When it starts manufacturing in the second half of next year, they are not optimistic about the company’s ability to turn the plant into a profitable performance engine. Citi maintained a neutral rating on the stock and a one-year price target of $22 per share, indicating a downside of 8.5% based on today’s closing price.
Federal funding should help Intel continue its stellar business, and it’s possible the company will receive additional government support in the coming years, even with the change in the presidential administration and the makeup of Congress. If Intel manages to scale up its third-party manufacturing operations and attract high-end chip design customers, its stock could rise above current levels. But the company still has a lot to prove in that regard.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Intel. The Motley Fool recommends the following options: Short February 2025 $27 calls on Intel. The Motley Fool has a disclosure policy.
Why Intel Stock Sank Today was originally published by The Motley Fool
