Trump Expands US Government Investment Portfolio

US President Donald Trump continues to expand what looks more and more like the US government's investment portfolio. This week, six chip companies signed letters of intent to receive government aid in exchange for a "non-controlling minority stake." If the deals close in the coming months, the number of companies in which the government holds a stake will rise to 30.

This involves up to 874 million dollars from the 2022 CHIPS Act budget, which was signed by former president Joe Biden. However, at the time, the money was distributed as grants, without the state receiving ownership in return. Donald Trump has made a sharp turn: the same budget, but now every dollar comes with a stake in the company.

One of the new names that received a new investment from the government is GlobalFoundries (ticker: GFS), which already signed a US government investment agreement in May in the field of quantum computing.

The truly unusual aspect of these moves is that Donald Trump does not hide his investments. He posts on his network about the companies in which the state has invested, congratulates "US citizens on such a good investment," and turns a move that is usually done quietly into an open political statement. An American president who publicly points to a specific stock and says "we bought right" is a rare phenomenon in a market that is supposed to be free.

A prominent example is Intel. The government, as you recall, acquired a stake of about 10% in the company, and since the deal was announced last summer, the stock has soared to record highs, so that on paper the state is sitting on an unrealized profit of more than 70 billion dollars. For Donald Trump, this is perfect propaganda material, and he does not hesitate to use it.

But Intel is just one example. The government portfolio already includes quantum computing (among other things, a new IBM venture), steel (where the government received a "golden share" in the Nippon Steel deal), nuclear energy (8% in Westinghouse), and rare metals, where the US holds stakes of between 5% and 15% in at least five companies. The pattern is similar: grants to relatively small and risky companies in exchange for ownership.

The moves by Donald Trump and the US government are also relevant to savers and investors in Israel, mainly because your money is already there. Popular index-tracking funds in pension funds, provident funds, and advanced study funds are heavily exposed to large American stocks, and chip companies are at the core of these indices.

When the US government enters as a partner and backs a company, it can push the stock upward, and everyone who holds it through pension savings benefits from this.

Israelis also have a local angle. Intel is one of the largest employers in the economy, with factories and extensive development activity in the country. Strong US government backing for the company affects not only the stock price in your portfolio, but indirectly also the stability of a giant employer here.

On the other hand, there are also warning signs here. When a government chooses winners and losers, the market stops pricing only based on performance and starts pricing based on political proximity as well. Some of the areas in which the government invests, such as quantum computing, are still far from real commercial profitability.

And if a government bet turns out to be a mistake, the loss will not remain only on the paper of the US government, but could spill over to everyone who rode those same stocks on the way up.

Bottom line, Donald Trump has turned the US government into an active and open player in the capital market, a move that generates impressive profits on paper but also blurs the line between economic policy and politics.