Intel Corp.‘s INTC stock has rewarded investors with a more than 20% gain year-to-date, but the U.S. government’s new equity stake in the chipmaker is prompting stark warnings from financial experts.

Citing the aftermath of the 2008 global financial crisis (GFC), one analyst suggests the government’s involvement could spell a decade of stagnation for the company’s shares.

Jamie Cox, Managing Partner for Harris Financial Group, drew a direct parallel to the government bailouts of major banks. “The U.S. took stakes in large banks during the global financial crisis, and the stocks were dead for 10 years,” Cox told Benzinga, adding that “caution is warranted for any company who cedes a stake to the government right now.”

The controversial move saw the Donald Trump administration acquire a nearly 10% stake in Intel for $8.9 billion, using funds from the CHIPS and Science Act.

Top economic adviser Kevin Hassett has defended the investment in a conversation with CNBC, framing it as a “down payment on a sovereign wealth fund.” President Trump has also expressed enthusiasm, stating he hopes to have “many more cases like” the Intel deal.

See Also: Trump Says 10% Stake In Intel Is A Done Deal: ‘I Think It’s A Great Deal For Them’

However, this new strategy of direct government intervention has sparked widespread criticism from free-market advocates. Economist Peter Schiff called the move a “terrible precedent” and a mistake that moves the nation “further away from free-market capitalism.”

In a social media post, Schiff argued, “The U.S. Govt. taking a 10% stake in $INTC is not only unconstitutional, it's a bad idea. Trump wasn't hired to run a hedge fund… Had Biden done this, Republicans would be livid.”

While the administration views these equity stakes as a new tool for economic policy, akin to tariffs, critics worry about the long-term consequences for the companies involved and the broader market.

Former Vice President Mike Pence has endorsed Republican strategist Marc Short‘s criticism of the Trump-led administration's stake in Intel, warning that the plan betrays the GOP’s free-market principles.

Pence reposted Short’s remarks on X, where he compared the move by Republicans to mimicking Iran, China, and Saudi Arabia, writing, “Well said @marcshort!” and highlighting his former aide’s statement: “This is not what Republicans stand for.”

Intel’s shares closed 0.81% lower on Tuesday and rose 0.082% after hours. It was up 20.43% YTD and 21.33% over a year.

Benzinga’s Edge Stock Rankings indicate that INTC maintains a stronger price trend in the short, medium, and long terms. However, the stock scores poorly on growth rankings. Additional performance details are available here.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Tuesday. The SPY was up 0.42% at $645.16, while the QQQ also advanced 0.40% to $572.61, according to Benzinga Pro data.

On Wednesday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading slightly higher.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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