Summary · why it matters
Stocks held by the Trump administration once surged sharply, pushing Intel up more than 300%, but they are now facing pressure from politics and lawsuits, raising concerns about the impact on the government's broad investment deals in private companies. On August 29, 2026, Bloomberg reported that investors who speculated by following Donald Trump have made significant profits over the past year, after the U.S. government adopted an unprecedented strategy of taking stakes in several listed companies. However, that strategy is facing increasing risks amid fiercely competitive midterm elections, as well as legal pressures that could question the government's authority to hold stakes in private companies. Market strategists see risks rising, as polls indicate that Democrats have a chance to win a majority in at least one chamber, which could open the door to scrutiny of Trump administration investments, both in Congress and in the judicial process, and could reverse the momentum that had driven these stocks. Matt Gertken, head of geopolitical and U.S. political analysis at BCA Research, said that such government intervention has not yet been fully tested in the U.S. political and legal system, making the process likely to face much volatility. One of the most prominent examples is Intel, whose stock price surged more than 300% in the year since reports first emerged that the Trump administration was discussing taking a stake in the chipmaker. Meanwhile, MP Materials, a rare earth producer, rose 87% since July last year, after the U.S. Department of Defense invested $400 million in the company's stock. Trilogy Metals, a Canadian mineral exploration company, saw its stock rise 73% since October, after the U.S. government agreed to take a 10% stake in the company, under a deal that included approval of a road project in Alaska, which is important for access to areas where the company holds mining rights. However, these strong returns have not been sustained; they have mostly been sharp spikes on news, before prices later weakened. Trilogy Metals' U.S.-listed shares once surged from $2.09 per share to a high of $10.60 within days of the deal announcement, before quickly giving back gains and recently trading around $3.62. MP Materials once soared more than 150% within five weeks after the government took a stake, but in the year since, the stock has fallen nearly 27%. For Intel, the situation is more complex, as the stock has also been supported by the chip stock rally, amid massive AI investment driving semiconductor demand. Intel shares had risen steadily on improving earnings and hit a peak in June, after Trump said Apple would work with Intel to design and manufacture semiconductors in the U.S. However, since that peak, Intel shares have fallen 37%, making it the fifth worst-performing stock in the S&P 500 over the same period. The Intel case could become a major test. One of the key risks weighing on Intel is a lawsuit filed by shareholders against the company's board, the U.S. Department of Commerce, and Commerce Secretary Howard Lutnick, seeking to void the government's stake. If the plaintiffs win, investors may need to reassess not only Intel but also the sustainability of the entire portfolio of stocks the Trump administration has invested in. Mark Malek, chief investment officer of Siebert Financial, which holds Intel shares, said the government investment was a key factor in turning the company around and remains one of the factors supporting the stock price today. So if that support is withdrawn, the key question is what happens to the stock price, which is why his firm has not added to its Intel position. Beyond legal risks, the midterm elections are another key factor. If Democrats can control the Senate or the House, they will have the power to hold hearings and issue subpoenas. Elizabeth Warren, a Democratic senator who could become chair of the Senate Banking Committee if the party controls the upper chamber, has already sent a letter to Lutnick questioning the Intel investment. Meanwhile, party leaders are laying the groundwork for investigations into companies linked to the Trump administration and the president's family. Henrietta Treyz, co-founder of Veda Partners, expects that if Democrats take control of committees, corporate executives and government officials could be called to testify before Congress, creating risks to both company reputations and stock prices. However, the risks from the judicial process could be even larger than the election risks. The Intel shareholder lawsuit argues that the Chips Act does not give the government the authority to demand company shares as a condition for receiving subsidies, and alleges that the deal violates the board's duties to shareholders and amounts to coercion to seize shares. Lutnick has asked the court to dismiss the case, arguing that the deal is authorized under federal law and is important to the U.S. defense industrial base. Intel CEO Lip-Bu Tan and other board members have also filed motions to dismiss. Josh Lipsky, senior director of the GeoEconomics Center at the Atlantic Council, said that if the court rules that the Chips Act does not authorize the Commerce Department to act as it did with Intel, the impact would not be limited to one company but could spread to many other deals. Ann Lipton, a law professor at the University of Colorado, echoed that view, saying such a ruling could call into question investments in other companies under the Chips Act, as the Commerce Department has used funds from the law to invest in several companies, including IBM and GlobalFoundries. From "bailing out companies" to the government picking winners. The Trump administration's approach also differs greatly from past U.S. government stakes in private companies, because previously the government often intervened during crises to rescue struggling companies. A key example is General Motors during the global financial crisis, when in 2009 the U.S. Treasury took a roughly 60% stake in GM to help the company emerge from Chapter 11 bankruptcy, before the government sold all its shares by 2013. But today, the government is not investing to rescue failing large companies; it is acting as a "picker of winners," investing in companies it deems strategically important. Aniket Shah, head of Washington, Sustainability and Transition Strategy at Jefferies, said the surge in stock prices reflects market belief that these companies not only have the government as a shareholder, but also have a customer and a spokesperson in the government that will help drive their success. But that relationship could become a long-term risk if the government gains more influence over business decisions, while investment flows follow political currents rather than fundamentals. Gina Martin Adams, chief market strategist at HB Wealth Management, warned that while government support can boost stock prices, part of the move may be investors chasing politics, making the momentum in these stocks very fragile.
Intel Corporation
Globalfoundries Inc
MP Materials Corp
Trilogy Metals Inc
Apple Inc.
General Motors Company
International Business Machines