Shares of Intel (INTC 3.51%) are moving higher on Monday, and were up 3.9% as of 1:58 p.m. ET and as much as 8.3% earlier in the day. The spike comes as the S&P 500 and Nasdaq Composite were relatively flat.
The struggling chipmaker's stock got a bump from news that its CEO, Lip-Bu Tan, will meet with President Donald Trump just days after he called for the CEO's resignation.
A high-stakes meeting
The Wall Street Journal reported that Tan will be the latest tech leader to make a trip to the White House. This meeting may have higher stakes than many others. Last week, President Trump said that Tan should resign immediately due to his ties to the Chinese government.
Investors in Tan's venture capital firm Walden International include U.S. government pension funds, major university endowments, and other backers that don't raise any red flags. However, the fund also has investments from the Chinese government and Semiconductor Manufacturing International (SMIC), the largest semiconductor maker in China. SMIC is under sanction by the U.S. government.
Image source: Getty Images.
Intel is one of the few U.S. chip manufacturers with real capacity
Tan is just months into his tenure as CEO of Intel, which desperately needs to turn its operations around. If he is forced out, it could throw the company further into turmoil at an extremely sensitive time.
The meeting gave investors hope that this outcome could be avoided. Furthermore, it presents the possibility that Tan might abandon his plans to scrap Intel's next-generation semiconductor manufacturing; the Trump administration places a high value on domestic manufacturing, especially in the very sensitive semiconductor industry. However, at this point, any thoughts on what this meeting might lead to are pure conjecture.
Intel continues to struggle, and its path to relevance in the uber-crucial AI maket is unclear. However, given that the company is one of the few with significant domestic semiconductor manufacturing capabilities and the strategic importance of those capabilities, I still think Intel is a good pick for investors with an appetite for risk.
