Intel’s $37 billion round trip from the government is a warning to anyone who still owns shares.

The 433.3 million shares of Intel that the government agreed to buy in August 2025 were worth about $61 billion as of June 22’s record close and about $24 billion as of Friday’s close, a round trip of $37 billion in five months, and the warning is aimed at people who own Intel in a much larger proportion than Washington. President Trump negotiated the stake to $20.47 per share by converting $8.9 billion in subsidies already given to Intel. On July 2, he told CNBC’s Joe Kernen, “I think we’ve made $60 or $70 billion in eight months.” » As of Friday’s close at $56.28, the paper gain stands at about $15.5 billion, and the stake value is still worth 2.75 times what the government paid.

Intel’s closing high was $140.94 on June 22. It closed Friday at $56.28, down 60%. Most of the damage occurred in two weeks: a 29% drop on October 30, the day after Intel’s outlook for the fourth quarter, then a further drop on November 4 and 5 for the rest of the chip group. Every close from April 8 to November 4 occurred 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 closed Dec. 26, has a $5 billion stake, worth about $12 billion, up from $30 billion in June. Arm and Marvell set their own records in June and have fallen 60% and 55% since then. As of today’s stock count, the three stocks have lost approximately $890 billion in market value.

The back and forth reads like a warning: a stock that triples thanks to hopes raised by AI can return most of that sum in five months, and a retiree who holds a block of it bears the entire balance alone; It’s also true that Intel’s business is doing better than its stock price, with data center revenue up 78% last quarter, so the warning is about concentration. Washington can handle a situation like this. She paid with grants and has no bills to pay. A household does it.

Consider a 66-year-old retired Intel engineer living in Hillsboro, Oregon, married to a 64-year-old woman. A career that ended in 2022 left 4,000 shares in a taxable account thanks to the stock purchase plan and grants, at an average cost of $32. They have $1.2 million in a rollover IRA, withdraw $48,000 a year from it, and between them collect $3,800 a month in Social Security. Intel paid them a dividend until 2024, when the company suspended it. The shares no longer earn anything in the meantime.

What June gave and what November took

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

Intel accounted for 32% of everything they own outside the home in June. It is now 15.8%. The market has done some of the diversification for them, at the worst possible price. The question is what to do with the remaining 15.8%: sell it, keep it, or exchange it for something larger.

Sell: the tax bill

Each share is a long-term gain, the federal rate is therefore 0%, 15% or 20% depending on the place of the gain in the couple’s income. Selling the 4,000 shares this year generates a gain of $97,120.

With $48,000 in IRA withdrawals and $45,600 in Social Security, the sale turns 85% of their Social Security into taxable income. Adjusted gross income is $183,880. The standard deduction is $32,200 plus $1,650 for a spouse aged 65 or older. His $6,000 senior deduction reduces to $3,967 as it gradually declines by 6 cents on every dollar of income over $150,000. Taxable income is $146,063, of which $48,943 constitutes ordinary income.

The 0% capital gains bracket amounts to $98,900 of taxable income for a couple in 2026. That leaves $49,957 of gain taxed at 0% and $47,163 taxed at 15%, or $7,074. Add in the additional Social Security that became taxable and the lost elderly deduction, and the sale adds $8,516 in federal tax this year, or 8.8% of the gain. The 3.8% net investment income tax starts at $250,000 of income, so it does not apply. The $183,880 income also remains $34,120 below the $218,000 line where Medicare supplements begin for a couple, although the 2026 report sets the 2028 premiums. Oregon additionally taxes the gain as ordinary income.

Sold 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 is $135,320, less than $150,000, so the senior citizen deduction remains full, and ordinary income of $46,910 leaves $51,990 of room in the 0% bracket. The whole gain corresponds. The sale adds $1,197 in federal tax, with all of it coming from Social Security becoming taxable.

Do the same in January, and the thresholds for 2027 will be a little higher, so the second half will lend itself at least as well. At this year’s thresholds for both halves, the two sales cost about $2,394 compared to $8,516 for a single sale, a savings of about $6,122. This is the whole reason why you shouldn’t sell in one click. This costs five weeks of market risk on half the position.

Hold: what you bet on

Intel’s third quarter, announced 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 still fell as the fourth-quarter outlook calls for revenue between $15.0 billion and $16.0 billion and adjusted earnings of 25 cents per share, less than half of the 52 cents just reported. PC chip revenue is expected to fall more than 20% from the third quarter, and CFO David Zinsner expects PC weakness to last at least through the first half of 2027.

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

Swap: what could the profits be used for?

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

Trading Intel for another chip stock that’s been cut in half is the same bet in a different package. Arm’s royalty revenue rose 8% last quarter while its shares trade at around 79 times expected earnings. Marvell agreed Nov. 2 to buy Lumentum in an all-stock deal valued at $115 billion, and its shares are 55% below their June high. A retiree who sells Intel to buy one or the other has changed his name on the risk, and nothing else.

The essentials

The government can watch its stake in Intel drop from $61 billion to $24 billion and shrug its shoulders. She paid nothing out of her own pocket and owes nothing on the shares. A 66-year-old with $225,120 of Intel in a $1,425,120 nest egg cannot. For them, the numbers add up: sell half in December and half in January, pay about $2,394 in federal taxes instead of $8,516, and move the money into the index fund that owns Intel, Arm and Marvell alongside 500 other companies. If giving up the entire position makes you feel like you’re leaving a company you’ve made a career at, keep 1,000 shares. That’s about 4% of your savings, small enough that a 29% day is a bad afternoon instead of a bad retirement.

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