Uncle Sam is no longer only a lender, regulator or buyer. Under President Donald Trump, the federal government has become a shareholder in several private companies.
Since January 2025, federal agencies have bought nearly $21 billion in stocks and ownership stakes in 17 businesses, from Intel Corp.’s (ticker: INTC) chip factories to companies involved in rare earth magnets. The federal government also recently announced letters of intent to issue $2 billion in grants to nine companies involved in quantum computing, including International Business Machines Corp. (IBM).
The trade might feel tempting for retail investors looking to cash in on companies backed by Washington.
But big questions remain about the government’s exit strategy and what these new portfolio holdings could mean for the free market.
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Why Washington Is Buying Stock in Companies
The Trump administration says it’s taking equity stakes to counter China’s dominance in key sectors and shore up U.S. supply chains, all while giving taxpayers a chance to share in the upside.
Semiconductors and critical minerals are at the center of the effort. The U.S. wants advanced chips produced at home, not in Taiwan, which currently accounts for more than 60% of the world’s semiconductor foundry revenue. It also wants to keep rare earths, lithium, copper and other critical materials outside China’s reach.
Funding for the administration’s stock investments comes from a web of sources. Intel’s stake converted unpaid CHIPS and Science Act grants and Secure Enclave funding into common stock. Critical minerals deals have leaned on the Defense Production Act, the Office of Strategic Capital and loan restructurings.
Historically, government intervention only stabilized companies during temporary crises or helped support growth across an entire sector.
What makes these deals different is the Trump administration is now operating more like an activist investor — buying stakes in firms as a way to mold the governance and commercial outcomes of specific businesses.
Alex Jacquez, chief of policy and advocacy at Groundwork Collaborative and a former Biden White House official, says that marks a political and economic shift.
“There used to be, at least among Republicans, some hesitancy and skepticism about forceful interventions into the private markets,” Jacquez says.
And unlike policy decisions in previous administrations, Trump hasn’t clearly explained why some companies get equity deals while others don’t.
“A lot of it seems to simply be about building a portfolio,” Jacquez says. “Trump wants to own part of these companies. He wants the value of those shares to go up. It seems like it’s now just become a transaction.”
The Government Isn’t Just Buying Stocks
The Trump administration’s investment activity is tracked by the Council on Foreign Relations (CFR), an independent and nonpartisan think tank. The organization estimates the federal government has spent $20.9 billion across 17 equity and quasi-equity deals since January 2025.
A majority of those investments flowed to two industries — semiconductors, which make up just over 52.4% of all investment dollars, followed by critical minerals at 42.5%, according to CFR’s government deals tracker.
The tracker shows Washington isn’t simply buying stock in the open market. Debt is part of half the deals, while other investments involve convertible preferred shares, warrants, government-backed loans, price floors and “golden share” rights.
“There are a number of different equity instruments, but warrants are typically what’s used,” says Arnab Datta, managing director for policy implementation at Employ America. “Warrants give you the right to purchase equity at a price that compensates you for that risk.”
But warrants don’t protect everyday investors from bad outcomes.
“Importantly, in the case of failure, there’s no compensation back to the taxpayer,” says Datta.
For investors, the structure of these deals matters. A common-stock purchase, such as Intel’s, is easier to track, while Lithium Americas Corp.’s (LAC) warrant-and-loan deal is more complicated. Some companies — such as ReElement Technologies and Vulcan Elements — aren’t even publicly traded, leaving everyday investors on the sidelines until a future initial public offering.
[Read: 7 Best Lithium Stocks and ETFs to Buy in 2026]
5 Stocks With Federal Backing
The following companies aren’t the Trump administration’s biggest federal deals. Some entities on CFR’s tracker are beyond the reach of retail investors because they’re foreign companies, private investment pools or companies not listed on U.S. exchanges.
Instead, these are examples investors can actually watch. Each one received federal backing with an equity angle, and each shows a different version of the opportunity — and risk — the U.S. government is taking.
Intel Corp. (INTC)
Last August, the U.S. government agreed to buy 433.3 million Intel shares at $20.47 each, giving Washington a 9.9% stake in the company, making it one of Intel’s largest shareholders. The stock also makes up the biggest position in the government’s growing portfolio of deals.
Investors piled into the trade. Intel closed at $24.80 on Aug. 22, and by the end of the year, it had increased over 48% to $36.90. On paper, Washington is up more than $43 billion as of mid-June, and Intel shares have gained 440% since Aug. 22.
“U.S. involvement and its stake helped the stock take off in 2026,” says Brian Colello, certified public accountant and senior technology equity analyst at Morningstar.
This isn’t the first financial partnership between Intel and Washington. In 2024, the Biden administration funneled billions in grants via the CHIPS Act to the struggling tech giant, which had fallen far from its Silicon Valley heyday.
“The CHIPS Act wanted very specific things to happen with Intel,” Jacquez says. “We wanted it to manufacture chips and be a leading-edge fab, not just a designer anymore.”
The Trump administration converted previously awarded but unpaid CHIPS Act subsidies into Intel equity stakes.
During the CHIPS era, Intel agreed to hit certain critical milestones as a condition of grant funding, but Trump nixed those benchmarks with the new deal.
Datta says replacing those conditions with equity creates a conflict between the government’s national security goal and its new financial interest as a shareholder.
“The purpose of the CHIPS Act wasn’t making a return, but incentivizing the buildout of chip manufacturing capacity here in the U.S.,” Datta says.
Trump is pleased with the deal. He’s publicly said he should have taken a bigger slice of the company. The president appears to be making up for it in his own investment accounts. Disclosures filed with the U.S. Office of Government Ethics show his accounts added Intel shares in March through six purchases totaling between $95,000 and $280,000.
With Washington now tied to Intel’s share price, some investors see the company as a strong buy. It’s easy to understand why.
“The U.S. is unlikely to let Intel fail,” Colello says.
That government backstop is valuable for Intel, especially considering the company’s financial issues in the past.
“Given the stock price rise and Intel’s shaky balance sheet prior to the deal, the U.S. government investment is a clear positive,” Colello says.
However, the Morningstar analyst says he doesn’t think government support makes Intel bulletproof.
“We still think there’s a big difference between ‘not failing’ and ‘printing money,'” Colello says.
Intel still needs to build a competitive foundry business and make the economics work.
“Intel will have to catch up on its own merits with advanced front-end chip production and back-end packaging that’s desired by customers,” Colello says.
The government is exploring other AI investments as well. In June, OpenAI CEO Sam Altman met with White House officials about a possible government stake in the AI company.
L3Harris Technologies Inc. (LHX)
L3Harris is a different kind of deal. In January, the Pentagon announced a $1 billion investment in the company’s Missile Solutions business through a convertible preferred security. The business makes solid rocket motors used in weapons systems such as Patriot interceptors and Tomahawk missiles.
L3Harris plans to spin off Missile Solutions into a new public company called Axyv. The government’s investment would convert into common equity when the unit goes public, which could be as soon as next month.
L3Harris’ stock hit record highs in the weeks following the announcement and closed Jan. 13 at $338.68. On June 18, shares closed at $294.82, down roughly 15% from the announcement-day close.
An IPO could give the government a path to profit, though it raises serious questions about conflicts of interest. The Pentagon buys weapons, awards contracts and regulates defense suppliers. If it also owns part of one supplier, rivals might begin to wonder if they’re competing on a level playing field.
“There’s a risk investors in these sectors will see an equity investment as evidence of the government putting its thumb on the scale,” Datta says. “So people may be less willing to invest in potential competitors.”
For investors, the upside depends less on the parent stock and more on whether the missile unit can command a strong valuation as a standalone defense company.
MP Materials Corp. (MP)
MP Materials owns the Mountain Pass mine in California, the only operating rare earth mine in the U.S.
The mine’s output is crucial for breaking China’s monopoly on the processing and production of rare earth magnets, which are used in everything from electric vehicles and drones, to robotics and weapons systems.
Last July, the Pentagon agreed to buy $400 million of newly created preferred stock in MP Materials, convertible into common shares at $30.03, along with warrants. On an as-converted basis, the Defense Department could become MP’s largest shareholder.
But the deal goes beyond equity. It also includes a 10-year price floor for certain products and federal support for purchases of all output from MP’s planned 10x magnet facility for 10 years.
“With the MP Materials deal, you have a company that’s necessary for national security that’s not particularly well capitalized in private markets with a lot of downward pressure on its stock,” Jacquez says.
Government ownership can give the company more breathing room, he says.
“Getting a base of government equity in there insulates MP from shareholder pressure at a time when we really need them to build an integrated critical minerals-to-magnet supply chain,” Jacquez says.
MP shares surged more than 33% in the week following the announcement. After closing near $61 on June 18, the stock had more than doubled from the government’s conversion price, though the stock has been somewhat volatile over the past year.
But a mine isn’t the same as a full supply chain.
“They’ve never produced a commercial magnet,” Datta says. “And so it begs the question: Why is MP the company getting this?”
[Read: 8 Top Nancy Pelosi Stocks to Buy]
USA Rare Earth Inc. (USAR)
In January, USA Rare Earth announced a nonbinding letter of intent with the Commerce Department for $277 million in common stock and a $1.3 billion secured loan. The company also said it would issue Commerce 16.1 million shares and about 17.5 million warrants.
USA Rare Earth is a more speculative rare earth bet than MP Materials. The company is trying to build a mine-to-magnet supply chain around the Round Top project in Texas and a magnet plant in Oklahoma.
The stock jumped after the announcement, closing Jan. 26 at $26.72, up 51% from a week before the deal. By June 18, shares were at $24.64, down 8.4% from the announcement-day close.
But the company is still far from a mature producer. In the first quarter of 2026, USA Rare Earth reported $36.8 million in operating expenses and a $36.7 million operating loss. Its net loss reached $68.1 million.
Washington may see a future national champion, but retail investors should recognize a development-stage company with heavy capital needs.
Trilogy Metals Inc. (TMQ)
Trilogy Metals is the smallest deal on this list. It’s also a clear example of how a small-cap stock can rocket on a Washington headline.
In October, the White House announced a $35.6 million investment in Trilogy Metals, part of a broader push to tap copper and other critical minerals in Alaska.
The agreement made the U.S. government a 10% shareholder and gave it warrants for an additional 7.5%.
The stock gained more than 200% the day after the announcement. By June 18, shares were at $3.70, still about 77% above the pre-announcement close but far below the early spike.
Trilogy is a small company — it had five full-time employees as of November 2024 and reported a $7.1 million net loss for its first fiscal quarter of 2026.
The politics are tough, too. Trilogy is trying to tap copper and other critical minerals in northwestern Alaska’s Upper Kobuk Mineral Projects, but the plan hinges on the Ambler Road, a long-disputed 211-mile industrial route through remote wilderness. Alaska Native villages and environmental groups have fought the road for years, warning it could damage wildlife habitat and local communities.
For investors, Trilogy shows both sides of the trade. Federal backing can send a small stock flying, but it can’t erase the challenges of a controversial mining project.
How Federal Dollars Are Re-writing Market Rules
Federal intervention in the economy isn’t new. Washington has steered the markets for generations, from wartime manufacturing to bank bailouts.
What’s new is the government taking equity-linked stakes in specific companies when there isn’t a crisis or a clear exit strategy.
The White House has called some of these investments “a direct windfall for American taxpayers,” but hasn’t enumerated how everyday individuals will actually capture potential upside.
Meanwhile, skeptics see a path to favoritism. Once the government owns part of a company, every future regulatory decision, contract award or loan generates potential conflicts of interest.
Jacquez says the bigger issue is the lack of transparency around how these deals are made and managed. “These deals come with very little oversight and what seems to be a tremendous amount of corruption,” Jacquez says.
He says it’s also unclear where the government’s shares are held or who is responsible for managing them. “These equity shares are held across different secretaries, different departments,” Jacquez says. “It’s not like they all exist in one centralized location or fund.”
Then there’s the exit question. When should the government sell?
Right now, there isn’t a clear answer.
If the goal is protecting taxpayers from the risk the government took, Datta says it should start selling once a company becomes profitable or a technology becomes commercialized.
“The government shouldn’t be holding equity stakes for the sake of it,” Datta says.
Jacquez says Congress may eventually need to step in. But for now, he says the more likely scenario is the next administration inheriting the portfolio.
“They’ll come in with all these holdings that they never expected and have to figure out how to dispose of them and what to do with the money,” Jacquez says.
Should Investors Follow Uncle Sam?
Investments made by the Trump administration show federal backing can move markets. It can also attract private capital and reduce financing risk.
It can also signal to individual investors that the government won’t let a company fail once it has skin in the game.
That logic is already playing out with Intel’s stock. Colello says the government’s stake gives the company a backstop, but that doesn’t make the stock cheap or guarantee Intel’s turnaround.
“We think the stock price reflects higher upside above our estimates,” Colello says. “We are at a $90 fair value estimate versus a $121 stock price.”
In other words, the market may already be pricing in a best-case scenario.
Government money can lower risk, but it doesn’t make it disappear for investors.
“There’s always a possibility a company can fail,” Datta says.
For retail investors, it’s best to treat federal backing as a signal, not an investment thesis. It shows that Washington sees strategic value in these companies, but it doesn’t prove the business is sound or the company can deliver on its promises.
That leaves a major question unanswered: Is Washington building national champions, or creating a market where investors have to guess which companies the government will favor next?
That might be great for traders chasing headlines, but long-term investors need more than a government seal of approval.
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Uncle Sam Is Buying Stocks. Should Investors Follow? originally appeared on usnews.com
