The US government reaped $26.5 billion in unrealized gains from its massive Intel investment last year. This development was directly linked to the rapid 22% increase in Intel shares following the quarterly report released on Friday. When Intel’s revenues and profits exceeded expectations, the company’s value on the Stock Exchange rose significantly in a short time.
Huge investment from the USA to Intel
This position is based on the agreement made in August, which was of significant size. Within the scope of the CHIPS Act, which took place during the Trump period, the US administration gave the company an incentive worth $ 8.9 billion and converted the Secure Enclave fund into 433.3 million Intel shares. Shares were purchased at $20.47 that day, and the public’s share in the company reached approximately 9.9%. While Intel shares were trading around $81.80 in pre-trading on Friday morning, the total value of this package of shares held by the US government is now close to $35.4 billion. This allows the investment to more than triple in a short time.
Investment is not limited to just shares. The US government also has the right to buy an additional 5% share from Intel at a price of $20 per share. It is stated that these options already have significant profit potential.
Surprise increase in Intel revenues and profits
The rapid rise in Intel’s shares started with the positive quarterly results announced by the company. First-quarter revenues increased 7% year-over-year to $13.6 billion. This amount was above market analysts’ expectations of $12.4 billion. The company also exceeded expectations in earnings per share: Intel announced a profit of $0.29, while analysts predicted an average loss of $0.01.
In particular, the Data Center and Artificial Intelligence segment grew by 22% compared to the same period last year, reaching 5.1 billion dollars. The demand for Xeon processors accelerated in parallel with the increase in artificial intelligence and infrastructure investments.
CEO Lip-Bu Tan said that the evolution in artificial intelligence-based computing creates a need for more CPUs; He emphasized that especially the processing of data and the transition to mediated tasks increased this demand.
Forward-looking expectations
Intel management announced its revenue expectation for the second quarter between 13.8 and 14.8 billion dollars. The continuation of the company’s current momentum is also being carefully monitored in terms of the large share package held by the US government.
