Trump's Industrial Policy Yields $40 Billion Paper Profit From Intel Stake

The U.S. government’s second-term foray into state capitalism, marked by $21 billion in investments across 16 companies, is outperforming the broader market, largely due to a nearly 370 percent surge in its Intel holdings. Since January 2025, five of the eight public companies in which the government has taken a stake have beaten the S&P 500.

"The Trump administration taking equity stakes in key sectors reflects how serious President Trump is about reshoring critical supply chains and safeguarding our national and economic security," said White House spokesman Kush Desai. "The federal government accruing sizable unrealized gains from these equity stakes reflects, moreover, how President Trump is always seeking the best bargain for American taxpayers in every deal he makes at home or abroad."

The government’s $11.1 billion investment in Intel last August, which included buying nearly 10 percent of the company at $20.47 a share, has produced a paper profit of approximately $40 billion. In contrast, the S&P 500 gained just 14 percent over the same period. Other significant gains include a $1 billion paper profit from a 136 percent rise in rare-earth miner MP Materials.

While the profits are currently only on paper, the strategy signals a deeper commitment to using the federal balance sheet to secure domestic supply chains for critical technologies like semiconductors and minerals. This approach, however, raises questions about market distortion and potential conflicts of interest, echoing other controversial foreign business dealings during the administration. The government is restricted from selling its Intel shares before August 27.

Intel Stake Drives Bulk of Paper Gains

The overwhelming majority of the portfolio's success rests on the Intel (INTC) investment. The government acquired 433.3 million shares, which are now valued at approximately $49 billion. President Trump recently highlighted the position on social media, stating he was "responsible for making the United States of America over 30 Billion Dollars in the last 90 days on that stock alone."

The terms of these deals are often more favorable than those available to private investors. In its deal with Intel, the government received shares at a set price. For its $2.3 billion loan to Lithium Americas, the U.S. received warrants to acquire 5 percent of the company at a near-zero strike price. These preferential terms are designed to secure government objectives but also contribute significantly to the outsized returns.

A Broader Industrial Strategy

Making a profit is not the primary objective of these investments. The deals are part of a wider industrial policy aimed at reducing U.S. reliance on China for materials and technologies deemed critical to national security. The portfolio is heavily weighted towards critical minerals companies, including a 15 percent stake in MP Materials and an investment in Trilogy Metals that has yielded a paper profit of over $90 million.

Not all investments have been successful. An investment of $1 billion into a unit of defense contractor L3Harris Technologies has seen an 11 percent decline. The government doesn't own equity in the parent company but would receive discounted shares in the Missile Solutions unit if it goes public. The mixed results highlight the inherent risks of the government acting as a venture capitalist, even as the top-line numbers are bolstered by the unprecedented Intel rally. The strategy continues a trend of blurring lines between public office and private enterprise, seen in other dealings from a Trump-licensed tower in Georgia to a luxury jet gifted from Qatar.

This article is for informational purposes only and does not constitute investment advice.