Washington is no longer just writing checks. It’s taking equity. After the U.S. took a 9.9% stake in Intel, officials have openly floated similar moves in defense and other “strategic” industries. Jefferies screened likely targets and fast growers that already live close to the federal spigot. Here’s what that shift could mean—and where investors are watching next.
What is “state capitalism” in this context?
In normal times, the US government funds priorities with contracts, grants, and tax credits—but rarely owns shares. That changed in August when Washington became Intel’s largest single investor (using unspent CHIPS Act grants plus Secure Enclave dollars). Days later, Commerce Secretary Howard Lutnick suggested government stakes in defence contractors might also make sense.
This isn’t TARP 2.0: it’s equity without a systemic crisis. That’s why Wall Street is paying attention. Stakes can bring:
- Pros: de-risked capital, stickier government demand, regulatory tailwinds, visibility on funding cycles.
- Cons: potential valuation drag (political interference, governance frictions), slower decision-making, and conflicts on pricing/returns—especially in defense.
So far? Markets are taking it in stride: large defense names have inched higher since the Intel stake; Intel is modestly lower; CHIPS peers are down slightly on average. The theme hasn’t repriced the market—yet—but it’s now an investable policy regime to track.
Where could Washington lean in next?
Jefferies highlights three filters that raise the odds of government “intervention” (equity, warrants, structured deals, revenue-sharing, or heavier operating strings):
- Inclusion in “strategic sectors,” as defined by the U.S. Cybersecurity and Infrastructure Security Agency
- Existing ties to the federal government, including large defense contracts and funding through the CHIPS Act
- “Exposure to adversary nations,” which would include China, as evidenced by the FT report of revenue-sharing agreements between the federal government, Nvidia and AMD, which those companies haven’t confirmed
Near-term watchlists
- Defense primes: LMT, BA, GD, RTX, HII, NOC (deep federal exposure; no obvious capital need—but most exposed to policy experiments).
- CHIPS recipients (> $1B): INTC, TSM, MU, Samsung, TXN, GFS.
- “Critical infrastructure” cohorts (energy, utilities, comms, payments) are in the conversation even without named companies.
Companies That Could Benefit From Trump’s State Capitalism
Jefferies screened 65 companies tied to at least $500 million in federal awards or CHIPS Act grants. To narrow the list, they focused on firms with ≥$1B market cap, majority Buy ratings. The sales estimates were adjusted by FactSet to match calendar years for companies whose fiscal reporting periods don’t match the calendar.
To set a baseline for expected sales growth, the S&P 500 is expected to increase revenue at a weighted compound annual growth rate (CAGR) of 5.92% from 2025 through 2027. This screen was limited to companies with projected sales CAGR of at least 1.5 times the expected growth rate of the index, or 8.88%.
Here are the potential targets for U.S. state capitalism that passed the screen, sorted by expected sales CAGR from 2025 through 2027:
| Company | Ticker | 2-Year Estimated Sales CAGR (2025–27) | Sept. 2 Price |
|---|---|---|---|
| Rocket Lab Corp. | $RKLB | 42.46% | 49.31 |
| Oracle Corp. | $ORCL | 19.76% | 225.30 |
| Microchip Technology Inc. | $MCHP | 18.68% | 63.60 |
| Taiwan Semiconductor (ADR) | $TSM | 16.98% | 228.39 |
| Micron Technology Inc. | $MU | 15.40% | 118.48 |
| SK Hynix Inc. | $000660 | 13.42% | 260,500 KRW |
| Boeing Co. | $BA | 12.43% | 237.38 |
| Analog Devices Inc. | $ADI | 10.74% | 248.32 |
| Macom Technology Solutions | $MTSI | 10.45% | 131.05 |
| Coherent Corp. | $COHR | 10.26% | 87.80 |
| GE Aerospace | $GE | 10.25% | 275.39 |
| X-FAB Silicon Foundries | $XFABF | 10.10% | 7.69 |
| Texas Instruments Inc. | $TXN | 9.95% | 199.81 |
| Corning Inc. | $GLW | 9.00% | 68.47 |
All of the companies were on Jefferies’ list of major recipients of grants under the CHIPS Act, except for Oracle Corp, Boeing Co, and GE Aerospace, which were on the list of companies receiving at least $500 million in federal awards.
Here is a summary of analysts’ opinions about the stocks, with prices and targets in local currencies where the stocks are listed
| Company | Ticker | Buy Ratings | Consensus Price Target | Implied 12-Month Upside |
|---|---|---|---|---|
| Rocket Lab Corp. | $RKLB | 65% | 46.58 | -6% |
| Oracle Corp. | $ORCL | 64% | 248.85 | +10% |
| Microchip Technology Inc. | $MCHP | 71% | 77.50 | +22% |
| Taiwan Semiconductor (ADR) | $TSM | 96% | 276.73 | +21% |
| Micron Technology Inc. | $MU | 85% | 153.74 | +30% |
| SK Hynix Inc. | $000660 | 81% | 338,935 KRW | +30% |
| Boeing Co. | $BA | 79% | 259.00 | +9% |
| Analog Devices Inc. | $ADI | 72% | 275.19 | +11% |
| Macom Technology Solutions | $MTSI | 81% | 152.54 | +16% |
| Coherent Corp. | $COHR | 83% | 113.56 | +29% |
| GE Aerospace | $GE | 75% | 302.79 | +10% |
| X-FAB Silicon Foundries | $XFABF | 83% | 7.31 | -5% |
| Texas Instruments Inc. | $TXN | 46% | 209.00 | +5% |
| Corning Inc. | $GLW | 75% | 72.17 | +5% |
Takeaway:
- The strongest growth stories: Rocket Lab (+42% CAGR), Micron (+30% upside), SK Hynix (+30% upside).
- The safe plays: TSM, Oracle, GE with high analyst confidence and double-digit projected returns.
- The riskiest picks: X-FAB and Rocket Lab show negative implied returns despite strong growth projections — highlighting the tension between policy-driven tailwinds and market skepticism.
Conclusion
Trump’s version of state capitalism is more than a passing experiment; it marks a shift in how Washington is willing to shape markets. For decades, U.S. investors assumed government equity stakes belonged to times of crisis. Now, they’re becoming tools of industrial strategy.
For investors, the lesson is simple: political risk and political opportunity are converging. Some companies will see their valuations supported by federal backing, while others may be constrained by government strings. Either way, ignoring this new reality could mean missing the next major driver of U.S. markets.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Related:
Trump Turns Washington Into America’s Biggest Activist Investor With Intel Deal
Trump’s 10% Stake in Intel: A “Great Deal” or Political Gamble?
