Oklo stock tumbles as Financial Times scrutinizes valuation
Investing.com - Shares of Intel (NASDAQ:INTC) and GlobalFoundries (NASDAQ:GFS) moved higher in U.S. trading on Friday, after a Wall Street Journal report that the Trump administration is weighing options to substantially lower U.S. reliance on semiconductor imports by boosting local manufacturing.
As of 10:32 AM ET, Intel rose by roughly 2.7%, while GlobalFoundries jumped by 5.6%.
European chipmakers, meanwhile, were widely lower in Friday’s session. Dutch lithography equipment manufacturer ASML’s shares edged down in early European trading, while other regional semiconductor players like ASM International and Infineon dipped by more than 1%.
In Asia, leading contract chipmaker Taiwan Semiconductor Manufacturing Co dropped 1.9%. South Korea’s Samsung Electronics stock also fell 3.3%, while SK Hynix shares slumped 5.6%.
The White House is considering a policy that would require chipmakers to produce the same number of chips in the U.S. as their customers import from abroad, the WSJ reported, citing people familiar with the matter.
Companies not producing in line with the 1:1 ratio will be subject to a tariff, the WSJ reported.
The plan is largely in line with Trump’s attempts to promote more domestic production in the U.S., with the president having last month slapped a 100% tariffs on all chip imports while exempting companies with U.S. manufacturing from the tariffs.
Commerce Secretary Howard Lutnick has discussed the idea with chip executives, according to the WSJ.
But it remained unclear just how Trump could achieve this goal, given the logistics and unit cost mechanics of overseas chip production. Foreign-made chips stand to be much cheaper than those produced locally due to lower input and labor costs, while setting up the infrastructure required to produce chips is also a time and capital-intensive process.
Intel has been featured heavily in the news recently, following the U.S. government’s acquisition of a 10% stake in the struggling chipmaker last month. Last week, NVIDIA invested $5 billion into Intel common stock, and this week, there are reports that the company has approached Apple and Taiwan Semiconductor Manufacturing about additional investments or partnerships.
Shares of Intel have reacted positively to the news events.
After jumping about 25% on the NVIDIA news, the stock gained another 15% on the Apple headlines. They are now up 70% year-to-date. Analysts expect the upside could continue.
"... we expect INTC stock to continue heading upwards, not as much due to fundamental reasons, but because the Intel CEO has managed to keep the company in the news," Lynx Equity analyst KC Rajkumar stated Friday. "After ignoring the stock for over a year, institutional investors may be forced to take a view."
(Frank DeMatteo contibuted to this article)