The bears and short sellers should have known that the CHIPS and Science Act would allocate billions of dollars to domestic chipmakers like Intel (NASDAQ:INTC). Intel was asking for over $10 billion in CHIPS Act incentives. Now, INTC stock is likely to rocket higher due to massive government financial backing.
A couple of years ago, stock traders had serious doubts about Intel CEO Pat Gelsinger’s ability to lead the company. Nowadays, however, Gelsinger and Intel are staging a powerful comeback. So, the only side of the Intel stock trade you should be on right now is the “long and strong” side.
Could INTC Stock Actually Reach $100?
Reportedly, Global Equities Research analyst Trip Chowdhry set a $100 price target on INTC stock not long ago. Chowdhry cited Intel’s ability to build “next generation” 18A and 14A artificial intelligence processors, but that’s not the only contributing factor.
There’s also the government funding to consider. $100 is a lofty price target, no doubt, but before you rule it out, think about how much money Intel is expected to receive.
With funding from the CHIPS and Science Act, Intel is set to receive $8.5 billion in grants and up to $11 billion in loans to build out its chipmaking factories. The ideal is for the U.S. to reduce its reliance on China and Taiwan for chips.
According to Bloomberg, Intel is the “first company to land a preliminary funding deal from the Chips Act for advanced manufacturing facilities.” Since this puts Intel ahead of its rivals, the idea of INTC stock reaching $100 isn’t out of the question.
Intel to Go on a Factory-Building Spree
Of course, the new funding’s purpose is for Intel to build and/or modernize chipmaking factories in the U.S. More specifically, the company will focus on chipmaking projects in Arizona, New Mexico, Ohio and Oregon.
Clearly, Intel has a lot of work to do now. Yet, the effort will undoubtedly pay off in the long run. Certainly, Intel’s new production plants will be top-of-the-line. Indeed, Gelsinger expects the chips made in the Arizona and Ohio factories to be “the most advanced chips in the world.”
Moreover, Intel will produce AI-enabled chips for other companies. On that topic, Gelsinger anticipates Intel will “be building many of those AI chips, not just Intel’s chips, but for industry participants as well.”
INTC Stock: $100 Might Come Sooner Than You Think
It’s just foolish to bet against a company with such strong public-sector financial backing. With that funding, Intel may be able to leapfrog ahead of its chipmaking competitors in the U.S.
Hence, Chowdhry’s $100 Intel share-price target isn’t entirely unrealistic. However, let’s see if the buyers can get INTC stock to $65 and $75 first. Those are realistic near-term targets, so today’s a great day to start a share position in Intel.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.