Is Intel’s Rally Here to Stay?

• Stacy Rasgon from Bernstein discussed Intel‘s (INTC) stock surge, attributing it to headlines about U.S. government influence promoting a “Made in America” semiconductor strategy, including potential TSMC involvement in various capacities.
• Despite the stock’s significant rise, Rasgon does not recommend buying Intel, citing no real change in the company’s fundamentals and expressing caution about shorting due to unpredictable political news impact.
• He doubts the feasibility of some rumored interventions, particularly technology transfer from TSMC to Intel, questioning why TSMC would voluntarily share its technology, suggesting such actions might not be entirely voluntary.

On a recent episode of ‘The Exchange’ on CNBC, Stacy Rasgon, a managing director at Bernstein, delved into the reasons behind Intel‘s (INTC) significant stock surge over the past week. Rasgon connected the rise to headlines suggesting U.S. government influence, particularly from the Trump administration, pushing for a “Made in America” semiconductor strategy. This has included potential proposals for TSMC to expand its U.S. manufacturing capabilities, invest directly in Intel’s manufacturing assets, or even engage in technology transfer to bolster Intel’s competitive edge.

Rasgon highlighted that despite Intel’s stock price being significantly beaten down, the recent positive news flow has led to a sharp increase, fueled by short sellers being squeezed out of their positions. He noted the stock’s short interest, which is about 2.5% or 108.6 million, highlights the risk of shorting stocks like Intel where news can dramatically shift investor sentiment overnight. However, Rasgon was clear in stating that Bernstein does not recommend buying Intel, explaining his reluctance to short the stock due to the unexpected nature of political announcements or tweets that could further propel the stock price.

Regarding fundamental changes, Rasgon was skeptical, suggesting that while the headlines might push the stock price, the actual business fundamentals of Intel have not shifted. He discussed the plausibility of TSMC expanding its U.S. operations or engaging in joint ventures but was particularly dismissive of the idea of technology transfer from TSMC to Intel, questioning why TSMC would willingly share its technological advancements. Rasgon’s analysis painted a picture of a stock caught in the whirlwind of political and market speculation rather than a genuine turnaround in Intel’s core business operations.

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