The Nasdaq-100 market index had a pretty average month in August 2025. The index score rose 0.9%, lagging behind the rival S&P 500's 1.9% gain.
But a few of the 101 stocks on the tech-heavy Nasdaq-100 index pulled their weight and more. Above all, microchip maker Intel (INTC +4.36%) posted an index-leading 23% return. The reason for Intel's big gain was quite unusual.
Image source: Getty Images.
Uncle Sam buys into Intel
The Trump administration gave Intel a helping hand on Aug. 23, setting up an $8.9 billion investment in Intel's stock. The U.S. government is now a large Intel investor, owning 9.9% of the company's shares. They were bought at $20.47 per share, roughly 18% below the market value on the day of the announcement.
The deal did not include rights to board seats or special government access to Intel's executives. It did include the option to buy another 5% stake through warrants, but only if Intel loses ownership of its chip manufacturing business within the next five years. Moreover, most of the financing is part of earlier government agreements, such as the CHIPS Act and the Secure Enclave program. The payments were simply accelerated.
How the government acquired these shares without visible dilution remains unexplained nearly three weeks later. How did the government build a 9.9% stake without diluting existing shareholders or purchasing on the open market? I don't know, but it happened -- somehow.
NASDAQ: INTC
Key Data Points
Intel's stock surge isn't as impressive as it looks
Intel's stock didn't skyrocket when the government deal was officially announced. Instead, it rose slowly as the unexpected and often contradictory details leaked out over several weeks.
The surge looks impressive in the short term, but loses power when you zoom out a bit. Investors don't see this government deal as a game-changer. Intel's stock dropped 11.6% in July due to an underwhelming earnings report, so it's up only 8.7% across July and August. It's also down 34.9% in two years, as of this writing on Sept. 11.
