Why Intel Stock Is Falling Today

Intel (NASDAQ: INTC) stock is losing ground in Tuesday's trading. The chip company's share price was down 3.8% as of 11:45 a.m. ET and had been down as much as 4.6% earlier in the day's session.

Intel stock is falling today amid concerns that the company might not get funding that it's slated to receive as part of the CHIPS Act. In particular, recent reports appear to have investors worried that the company may not move ahead with the planned construction of a semiconductor fabrication plant in Ohio.

Investors are concerned Intel may not get CHIPS Act funding

Recently published reports show that officials in Ohio are concerned about whether federal funding for a planned chip fabrication plant in the state will actually arrive. The plant is projected to cost roughly $20 billion to build and likely won't be possible if funding from the CHIPS Act doesn't come through.

Ohio Governor Mike DeWine recently stated that Intel had told him that the federal government hadn't been keeping to its previously stated funding plans. The delayed funding timeline has raised questions about whether the company will actually get the much-needed capital injection.

Following the recent election victory for Donald Trump and Republican victories in the House and Senate, some investors and government officials are worried that the CHIPS Act could be repealed. Even if the legislation were not repealed, it's possible that funding allocations could be altered or made with additional stipulations.

What comes next for Intel and federal funding of the chips industry?

Intel is slated to receive $19.5 billion in funding through the CHIPS Act, with $8.5 billion in direct grants and an additional $11 billion in loans. But thus far, the company hasn't received any of that cash. Intel's struggles and Trump's election win have cast some doubt on whether the semiconductor giant will receive the full amount of funding -- or even any at all. But there are reasons to think that these concerns may be overblown.

While Trump and some other Republicans have made comments criticizing the CHIPS Act, strengthening domestic chip production is a vital national security and economic issue that has significant bipartisan support. Much of the rising tensions between the U.S. and China center around the latter country's desire to exert more control over Taiwan, the global hub for advanced semiconductor fabrication.

With artificial intelligence (AI) technologies set to shape military and defense dynamics in the coming years, having access to the foundational hardware that makes advanced AI applications possible is a crucial national interest. Intel remains the best U.S. candidate for improving domestic fabrication capabilities, and there's a good chance it will receive large amounts of government support.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel. The Motley Fool recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.