What began as a strategic government intervention to rescue a struggling American chipmaker has turned into one of the most profitable public investments in recent memory. The U.S. government’s 10% stake in Intel Corporation, acquired last August for $8.9 billion, has soared in value as the company’s stock has rocketed more than 330% since that deal was struck — a surge turbocharged today by a major new agreement with Apple.
Intel has reached a preliminary deal with Apple to manufacture some of the chips that power the iPhone maker’s devices, according to a Wall Street Journal report published Friday. The companies engaged in intensive talks for more than a year before hammering out a formal agreement in recent months.
Intel stock surged more than 15% on the news, while Apple shares rose roughly 1.7% in afternoon trading.
A Government-Brokered Deal
The Apple agreement did not happen in a vacuum. The U.S. government, which became Intel’s largest shareholder last year under a deal with CEO Lip-Bu Tan, played a major role in bringing Apple to the negotiating table. President Trump personally advocated for Intel to Apple CEO Tim Cook in a meeting at the White House, according to people familiar with the matter.
Trump has made no secret of his enthusiasm for the investment. Last week, the president wrote on Truth Social: “Intel Stock continues to rise. I’m very proud of that Company in that I am responsible for making the United States of America over 30 Billion Dollars in the last 90 days on that stock alone. Congratulations to Intel on doing such a great job and, more importantly, congratulations to the People of the United States for making such a good investment!”
Why Apple Needed Intel
For Apple, a deal with Intel could mean a meaningful diversification in manufacturing, giving it the ability to secure more capacity. Apple has been heavily dependent on extremely tight capacity at TSMC — Apple CEO Tim Cook said at the company’s most recent earnings that iPhone sales were held back by supply constraints at its contract manufacturer.
The possibility of an Intel partnership has been building for years. Apple has relied on TSMC as its primary chip fabricator for more than a decade, but the global silicon economy and geopolitical risks around Taiwan-based production have pushed Apple to explore alternatives.
Intel would manufacture chips based on Apple’s own chip designs, much like TSMC currently does. Prior reports suggested Intel could make some of the lower-end processors used in Apple devices, including the lowest-end M-series chips used in select iPad and Mac models.
Intel’s Stunning Turnaround
Intel is now up over 330% since the U.S. government took its 10% stake last August. The chipmaker also posted its best month ever in April, surging 114%. The rise of artificial intelligence has renewed demand for Intel’s central processing units, with CEO Lip-Bu Tan calling CPUs an “indispensable foundation of the AI era.”
Beyond the Apple deal, Intel has spent the past year signing agreements with the U.S. government and securing investments from Nvidia and SoftBank as part of CEO Tan’s push to turn the chipmaker around.
What Comes Next
It remains unclear which specific Apple products Intel would manufacture chips for. Apple ships more than 200 million iPhones per year, as well as millions of iPads and Mac computers. Intel’s most advanced process node, called 14A, is expected to reach production in 2028, while its current 18A node is already in use.
Analysts caution that the stock’s valuation has run far ahead of fundamentals. Intel’s forward price-to-earnings ratio now sits near 119, with the average analyst price target well below today’s trading price.
