Advanced Micro Devices Inc. (NASDAQ:AMD) reversed its Friday gains on Monday after the Trump administration unveiled an $8.9 billion investment in rival Intel Corp. (NASDAQ:INTC), giving the U.S. government a 9.9% equity stake in the chipmaker.

The move, designed to bolster domestic semiconductor production, brings total federal support for Intel to $11.1 billion. Intel framed the agreement as a reinforcement of both U.S. national security and economic competitiveness.

President Donald Trump posted on Truth Social that he secured Intel shares for "zero" cost, now worth about $11 billion for the U.S. He called the deal a win for jobs, growth, and national wealth and pledged to keep striking similar agreements to boost companies' stock values while making America "richer and richer."

Also Read: AMD Stock Slips as Rivals Arm, Nvidia, and Intel Make Bold Moves to Strengthen Their Semiconductor Market Positions

TF Securities analyst Ming-Chi Kuo said President Trump's $11 billion Intel stake shows strong confidence in the chipmaker but won't immediately close its technology gap. Kuo emphasized that the deal lifted Intel's valuation floor, channeled all proceeds into operations, and signaled a long-term commitment to the U.S. without political control.

AMD shares have climbed 36% year-to-date, outpacing Intel's 26% gain. On May 21, Bank of America's Vivek Arya said AMD has strong upside potential, citing CPU share gains, AI growth, $10 billion Middle East contracts, and a cyclical recovery.

He called AMD undervalued at ~20x 2026 PE and sees $6.6 billion sales upside by 2027, with growing relevance in data center, AI, PC, and gaming markets.

Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market.