Intel’s $46 Billion Government Windfall Masks a Server Market Share Erosion

US Intel stake hits $46B, Trump regrets not taking more. Strong Q1 results but market share slips to 54.9% from 64%; analysts cautious, avg target $83.94.

The US government’s stake in Intel has ballooned to more than $46 billion, a fivefold increase from the $8.9 billion it paid last summer for roughly 433 million shares at $20.47 each. Donald Trump, who brokered the deal, now says he regrets not demanding a larger slice. “I should have asked for more,” he told Fortune, describing how he persuaded then-CEO Lip-Bu Tan to hand over 10 percent of the company “for free.” The funds came from the CHIPS and Science Act and related semiconductor programs, and the unrealized profit already exceeds $35 billion. Trump has indicated he plans to sell down the position gradually to avoid rattling the market.

The political windfall arrives alongside some of Intel’s strongest operational results in years. First-quarter revenue climbed 7 percent to $13.6 billion, while adjusted earnings per share came in at $0.29 — vastly ahead of the $0.01 consensus. Gross margin beat the company’s own forecast by 650 basis points, marking the sixth consecutive quarter in which Intel has surpassed expectations. Management has guided for second-quarter revenue of $13.8 billion to $14.8 billion, and the shift from AI training to inference workloads is expected to lift the ratio of CPUs to GPUs in data centers from roughly one-to-four today to one-to-one. Intel says it is already sold out of server CPUs for 2026 and is considering price increases of 10 to 15 percent.

Yet the rally — the stock has surged 176 percent year to date and hit a 52-week high of €109.88 on May 11 before retreating roughly 15 percent — sits uncomfortably against a deteriorating competitive picture. In the first quarter of 2026, Intel’s share of the server processor market slipped to 54.9 percent, down from more than 64 percent a year earlier. That erosion is happening even as total server shipments grew 19 percent year on year, driven by insatiable demand for AI infrastructure. AMD has grabbed a 27 percent share, while Arm Holdings now commands nearly 18 percent. UBS sounded the alarm, noting that Intel is losing ground in the very segment where margins are highest.

Analyst opinion reflects this divide. Citi raised its price target to $130, citing Intel’s new manufacturing processes and a recent pact with Elon Musk’s AI company. Benchmark lifted its target to $140. But the broader consensus remains cautious: of 34 analysts tracked by one survey, the majority rate the stock a Hold, with an average target of $83.94 — roughly 22 percent below the current price. A separate poll of 44 analysts shows 31 recommending Hold and an average target of $79. RBC Capital Markets sticks to a target of $80.

Intels’s next big test comes with the second-quarter earnings report, when investors will learn whether the company can actually enforce the server-CPU price increases it is weighing. That report, more than any presidential interview, will determine whether the government’s paper billions can be locked in — or whether the market share losses will eventually catch up with the stock.