The Government’s $37 Billion Intel Round Trip Is a Warning for Anyone Who Still Holds the Stock

The 433.3 million Intel shares the government agreed to buy in August 2025 were worth about $61 billion at the June 22 record close and about $24 billion at Friday’s close, a $37 billion round trip in five months, and the warning in it is for the people who hold Intel in a far bigger proportion than Washington does. President Trump negotiated the stake at $20.47 a share by converting $8.9 billion of grants Intel had already been awarded. On July 2 he told CNBC’s Joe Kernen, “I think we made 60 or $70 billion in eight months.” At Friday’s close of $56.28 the paper gain is about $15.5 billion, and the stake is still worth 2.75 times what the government paid.

Intel’s record close was $140.94 on June 22. It closed Friday at $56.28, down 60%. Most of the damage came in two weeks: a 29% drop on October 30, the day after Intel’s fourth-quarter outlook, then another slide on November 4 and 5 with the rest of the chip group. Every close from April 8 to November 4 was above Friday’s price, so anyone who bought during those seven months is underwater. The stock is still up 43% in 2026. Nvidia, which bought 214.8 million shares at $23.28 in a deal that closed December 26, has a $5 billion stake worth about $12 billion, down from $30 billion in June. Arm and Marvell set their own records in June and have fallen 60% and 55% since. At today’s share counts the three stocks have lost about $890 billion of market value.

The round trip reads as a warning that a stock which triples on hopes about AI can give most of that back in five months, and a retiree holding a block of it carries the whole swing alone; it is also true that Intel’s business is doing better than its share price, with data center revenue up 78% last quarter, so the warning is about concentration. Washington can sit through a swing like this. It paid with grants and has no bills to meet. A household does.

Take a 66-year-old retired Intel engineer in Hillsboro, Oregon, married to a 64-year-old. A career that ended in 2022 left 4,000 shares in a taxable account through the stock purchase plan and grants, at an average cost of $32. They have $1.2 million in a rollover IRA, draw $48,000 a year from it, and collect $3,800 a month in Social Security between them. Intel paid them a dividend until 2024, when the company suspended it. The shares now pay nothing while they wait.

What June gave and what November took

On June 22 the 4,000 shares were worth $563,760. On Friday they were worth $225,120. That is $338,640 gone in five months, about $340,000, and it happened without a single sale. The gain over what they paid went from $435,760 to $97,120.

Intel was 32% of everything they own outside the house in June. It is 15.8% now. The market did part of the diversifying for them, at the worst possible price. The question on the table is what to do with the 15.8% that is left: sell it, hold it, or swap it for something broader.

Sell: the tax bill

Every share is a long-term gain, so the federal rate is 0%, 15% or 20% depending on where the gain lands in the couple’s income. Selling all 4,000 shares this year realizes a gain of $97,120.

With $48,000 of IRA withdrawals and $45,600 of Social Security, the sale pushes 85% of their Social Security into taxable income. Adjusted gross income comes to $183,880. The standard deduction is $32,200 plus $1,650 for the spouse who is 65 or older. His $6,000 senior deduction shrinks to $3,967, because it phases out at 6 cents on every dollar of income over $150,000. Taxable income is $146,063, of which $48,943 is ordinary income.

The 0% capital gains bracket runs to $98,900 of taxable income for a couple in 2026. That leaves $49,957 of the gain taxed at 0% and $47,163 taxed at 15%, or $7,074. Add the extra Social Security that became taxable and the lost senior deduction, and the sale adds $8,516 of federal tax this year, 8.8% of the gain. The 3.8% net investment income tax starts at $250,000 of income, so it does not apply. Income of $183,880 also stays $34,120 under the $218,000 line where Medicare surcharges begin for a couple, though the 2026 return sets 2028 premiums. Oregon taxes the gain as ordinary income on top.

Sell in two pieces

Sell 2,000 shares in December and 2,000 in January and the picture changes. This year’s gain is $48,560. Income comes to $135,320, under $150,000, so the senior deduction stays whole, and the ordinary income of $46,910 leaves $51,990 of room in the 0% bracket. The whole gain fits. The sale adds $1,197 of federal tax, all of it from Social Security becoming taxable.

Do the same in January, and the 2027 thresholds will be a little higher, so the second half fits at least as well. At this year’s thresholds for both halves, the two sales cost about $2,394 against $8,516 for one sale, a saving of about $6,122. That is the whole case for not selling in one click. It costs five weeks of market risk on half the position.

Hold: what you are betting on

Intel’s third quarter, reported October 29, was the company’s best in years. Revenue rose 21% to $16.5 billion. Data center revenue rose 78% to $7.3 billion, the fastest growth in 15 years, and management says demand for its server chips still exceeds what it can supply. The stock fell anyway, because the fourth-quarter outlook calls for revenue of $15.0 billion to $16.0 billion and adjusted earnings of 25 cents a share, less than half the 52 cents just reported. PC chip revenue is expected to drop more than 20% from the third quarter, and the chief financial officer, David Zinsner, expects the PC weakness to last at least into the first half of 2027.

At $56.28 Intel trades at about 33 times expected earnings. The average analyst target is $91.12, 62% above Friday’s close; 4,000 shares at that price would be worth $364,480. Those targets were higher than the price in October too, before the stock lost half its value. Holding means keeping 15.8% of your savings in one stock that moved 29% in a day two weeks ago, with no dividend to pay you while you wait.

Swap: what the proceeds could do

If the $225,120 goes into a low-cost S&P 500 index fund and earns 5.8% a year, the midpoint of Vanguard’s ten-year forecast for U.S. stocks, it becomes about $395,613 in ten years. That is less than the $364,480 the analyst target promises, and it does not depend on one company’s PC business recovering.

Swapping Intel for another chip stock that has been cut in half is the same bet in a different wrapper. Arm’s royalty revenue grew 8% last quarter while its stock trades at about 79 times expected earnings. Marvell agreed on November 2 to buy Lumentum in an all-stock deal valued at $115 billion, and its shares are 55% below their June record. A retiree who sells Intel to buy either one has changed the name on the risk, and nothing else.

The bottom line

The government can watch its Intel stake go from $61 billion to $24 billion and shrug. It paid nothing out of pocket and owes nothing against the shares. A 66-year-old with $225,120 of Intel in a $1,425,120 nest egg cannot. For them the numbers point one way: sell half in December and half in January, pay about $2,394 in federal tax instead of $8,516, and move the money into the index fund that holds Intel, Arm and Marvell alongside 500 other companies. If giving up the whole position feels like quitting on a company you spent your career at, keep 1,000 shares. That is about 4% of your savings, small enough that a 29% day is a bad afternoon instead of a bad retirement.

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