After NVIDIA Deal, U.S. Government's Stake in Intel is Worth $14 Billion

The U.S. government’s bold bet on Intel Corp. appears to be paying off after Nvidia Corp. unexpectedly stepped in with a multibillion-dollar investment that sent Intel’s stock soaring to heights not seen in nearly four decades.

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Shares of Intel surged as much as 28% on Thursday following the announcement that Nvidia will pour $5 billion into the company while teaming up to design chips for both PCs and data centers. The news arrives less than a month after President Donald Trump secured a landmark agreement for the U.S. government to acquire roughly a 10% stake in Intel.

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That rally propelled Intel’s stock to an intraday high of $31.79, significantly boosting the value of Washington’s holding. The government’s stake, initially worth about $9.1 billion, is now valued at approximately $14 billion representing a $4.9 billion paper gain since the August deal. Under the agreement, the U.S. purchased 433.3 million Intel shares at $20.47 each.

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According to a regulatory filing last month, Intel has already delivered 274.6 million shares to the Department of Commerce. The remaining 158.7 million shares were placed in an escrow account and will be gradually released to the government as additional payments are made to Intel under the provisions of the Chips Act.

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The partnership with Nvidia represents another critical boost for Intel, which has been fighting to regain its footing after years of manufacturing setbacks and market share losses. The rise of artificial intelligence has shifted industry growth toward AI-focused chips an area where rivals like Nvidia and AMD have pulled ahead, leaving Intel under pressure to reinvent itself.

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While the two companies did not disclose a launch timeline for chips developed under this agreement, the announcement alone has reshaped investor sentiment. Intel’s stock now trades at 57 times projected 12-month earnings, its highest multiple since the early 2000s dot-com boom. The sudden jump in valuation underscores Wall Street’s renewed optimism but also raises questions about whether expectations have run too far ahead of reality.

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“Wall Street is filled with stories of companies that looked dead but managed to rise like a phoenix from the ashes,” noted Ted Weisberg, a trader at Seaport Securities. “It’s still too early to know what this partnership ultimately delivers, but right now, it feels like a breath of fresh air.”

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For Intel, the Nvidia deal comes at a pivotal moment. The company has faced ongoing challenges in producing cutting-edge chips, repeatedly falling behind competitors in advanced manufacturing technology. Meanwhile, the semiconductor industry’s hottest growth driver AI processors has largely been dominated by Nvidia, with demand soaring as generative AI continues to expand.

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This co-development agreement could help Intel reassert itself in high-performance computing while giving Nvidia a chance to diversify its partnerships and strengthen its own role in shaping the future of PC and data center hardware. Investors view the collaboration as a mutually beneficial move, but the biggest immediate winner may be the U.S. government, whose stake has already appreciated sharply.

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Despite the excitement, analysts caution that execution risk remains high. It will take time before investors see tangible results from the joint development efforts, and Intel must still prove that it can compete effectively in an industry where speed and innovation are everything.

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Still, the sudden rally highlights how quickly fortunes can change in the stock market. Just weeks ago, Intel was seen as a lagging player struggling to keep up in the AI race. Today, thanks to a timely government backstop and Nvidia’s surprising show of confidence, the company finds itself at the center of Wall Street’s attention.

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As Weisberg suggested, Intel’s story is far from over. If the partnership delivers real progress, the chipmaker could write one of the most remarkable comeback stories in tech a revival that not only benefits shareholders but also validates the U.S. government’s strategic bet on domestic semiconductor leadership.

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