The semiconductor industry faces a new challenge as President Donald Trump’s administration plans to cut approximately 500 jobs at the National Institute of Standards and Technology (NIST), potentially jeopardizing the future of the CHIPS Act. Analyst Robert Maire said these cuts could effectively kill the initiative to bolster domestic semiconductor manufacturing, which included roughly $39 billion in subsidies.
"If there are no employees left to administer the CHIPS Act program, it is dead by default, as there is no one left to certify that companies have met their requirements, let alone write the checks," Maire warned in a note to clients.
According to a MarketWatch report, NIST could see significant staff reductions as early as this week. The cuts would primarily target those administering the semiconductor investment program established under President Joe Biden.
The report further explains that major U.S. chipmakers Intel (INTC) and Micron Technology (MU), which have been awarded significant funding for new fabrication facilities, could face project uncertainty.
Given these factors, here are two AI stocks that could remain under pressure in 2025.
AI Stock #1: Intel
Intel (INTC) is arguably the biggest beneficiary of the CHIPS Act, as it has been awarded up to $7.86 billion to support semiconductor manufacturing and advanced packaging projects in the U.S.
While Intel is among the largest semiconductor companies in the world, it has trailed its peers and the broader market by a wide margin in recent years. For instance, INTC stock has fallen 27% in the past decade, while the VanEck Semiconductor ETF (SMH) has returned close to 755% in that same time period. Taiwan Semiconductor (TSM) seized the manufacturing lead, while Advanced Micro Devices (AMD) eroded Intel’s CPU market dominance, leading to these lackluster returns.
Intel’s turnaround efforts are also uncertain after CEO Pat Gelsinger’s surprise retirement in late 2024. As Intel searches for new leadership, it's battling the need to both advance its ambitious foundry investments and stabilize its declining CPU market share.
Intel’s foundry strategy hinges on its Intel 18A process, which is scheduled for volume production later this year. The company has secured Microsoft (MSFT) and Amazon (AMZN) as customers, but it needs many more wins to justify its massive manufacturing investments.
In product development, Intel presents a mixed picture. Its desktop CPUs struggle against AMD’s offerings, particularly in gaming performance, although its laptop chips remain competitive with positive early reviews for Arrow Lake processors. Last week, the Wall Street Journal reported that Broadcom (AVGO) is exploring a bid for Intel’s product business, while TSMC might take over its manufacturing operations.
Analysts tracking Intel stock expect adjusted earnings to grow to $1.19 per share in 2026, compared to a loss of $0.13 per share in 2024. This suggests that INTC stock is priced at 20.4x forward earnings, which is reasonable if the company can demonstrate an ability to improve profit margins over the next two years.
Out of the 37 analysts covering INTC stock, one recommends a “Strong Buy,” 30 recommend a “Hold,” one recommends a “Moderate Sell,” and five recommend a “Strong Sell.” The average target price for Intel stock is $24.21, similar to the current trading price.
AI Stock #2: Advanced Micro Devices
Advanced Micro Devices (AMD) is in a familiar position: playing second fiddle in a critical tech market. While it successfully challenged Intel in PC processors over the past decade, AMD now faces an uphill battle against Nvidia (NVDA) in the artificial intelligence GPU market.
AMD’s stock has plummeted more than 50% from its all-time high as investors question its ability to compete effectively in the AI race. Despite this decline, the company presents a mixed picture across its four divisions.
The Data Center segment grew 69% year-over-year but missed analyst expectations with $3.86 billion in revenue. This pales compared to Nvidia's staggering $30.8 billion in data center sales (up 112%) during roughly the same period.
AMD’s overall fourth-quarter revenue increased 24% year-over-year, but net income decreased 28% due to margin pressure. While the Client division showed strong growth, weakness in the Gaming and Embedded segments limited overall performance.
However, AMD stock remains attractive to value and growth investors. The semiconductor stock is forecast to expand earnings from $3.31 in 2024 to $4.73 in 2025 and $6.34 in 2026. So, priced at 22.8x forward earnings, AMD stock should deliver outsized gains to shareholders.
Out of the 41 analysts covering AMD stock, 27 recommend “Strong Buy,” one recommends “Moderate Buy,” and 13 recommend “Hold.” The average target price for AMD stock is $146, indicating upside potential of over 30%.
