Intel Stock Soars with Second Largest Gain in 2025 Following VP Vance’s Announcement on Powerful AI Chips Made in America

This article is not investment advice. The author does not hold any positions in the stocks referenced.

Intel Corporation recently experienced a 7% surge in its stock price, fueled by Vice President JD Vance’s announcement emphasizing the administration’s commitment to developing AI chips within the United States. Currently, the Taiwan Semiconductor Manufacturing Company (TSMC) dominates the global production of AI processors, while NVIDIA Corporation leads in AI processor shipments with its cutting-edge GPU designs. Vance’s comments prompted confidence among investors in Intel, the sole American company equipped to design and manufacture high-end chips essential for handling AI workloads. However, it is worth noting that Intel’s stock has suffered a decline of over 50% in the past year due to ongoing challenges in revitalizing its chip manufacturing operations and managing elevated costs.

Vance Advocates for US AI Chip Manufacturing at Paris AI Summit

During his keynote address at the Paris AI Summit, JD Vance articulated his vision for the future of AI in the United States, marking his inaugural foreign trip since assuming office. He firmly stated that AI will not displace jobs but rather enhance job creation across the nation. Vance envisions a future where AI empowers individuals and bolsters American productivity, thereby facilitating prosperity and freedom.

Positioning the United States as a frontrunner in AI, Vance expressed his administration’s resolve to maintain this status. He emphasized that the US possesses the comprehensive components necessary to innovate within the entire AI ecosystem, which includes advanced semiconductor design, leading-edge algorithms, and transformative applications.

Vance elaborated on the critical need for computing power to support the full AI stack—consisting of chips, algorithms, and applications—asserting that enhancing this capability is vital to “safeguard America’s advantage”in the field of AI. He assured that the administration will prioritize the development of powerful AI systems in the United States using chips that are both designed and manufactured domestically.

Intel Gaudi vs NVIDIA H100 AI Accelerators

The resurgence in Intel’s stock was significantly influenced by Vance’s declarations, particularly given the company’s unique position as America’s only viable manufacturer of advanced chips critical for developing sophisticated AI technologies. Additionally, Intel has benefitted from billions in subsidies under the Biden Administration’s bipartisan CHIPS and Science Act, funds which arrive as the firm navigates through a difficult phase in its contract chip manufacturing sector.

Despite these developments, Intel’s contract manufacturing segment has yet to commence volume production, leaving any immediate American chip orders in a state of anticipation. The majority of the world’s AI chips continue to be produced by TSMC, with designs primarily from NVIDIA. TSMC is scheduled to launch production using its advanced 2-nanometer semiconductor technology in 2025, while Intel is expected to introduce its competitive 18A node technology this year.

The successful realization of 18A production and effective scaling within its foundry operations are pivotal for Intel’s strategic goals. The company’s management has been tight-lipped following the unexpected departure of former CEO Patrick Gelsinger last year, particularly regarding its potential plans to divest the manufacturing division or streamline its financial structure. Year-to-date, Intel’s shares have risen by 5%, with today’s increase marking the most significant rise since a 9% jump earlier in January.

Source & Images