Intel Locks $20 Billion Stock Sale to Fund Foundry Expansion and AI Push
The mega-raise follows a 25% surge in second-quarter revenue, with net proceeds of $19.7 billion earmarked for capital spending and working capital as the company accelerates its 18A node manufacturing capabilities.
Intel Corporation has finalised a $20 billion common stock offering, selling 210 million shares at $95 each. The deal, led by J.P. Morgan, Goldman Sachs, Morgan Stanley, and Citigroup, is scheduled to close on 12 August. Intel expects net proceeds of approximately $19.7 billion to fund capital spending, working capital, and its foundry expansion. This follows strong second-quarter results, with revenue rising 25% year-on-year to $16.1 billion, driven by a 59% surge in the Data Center and AI segment.
The offering represents a significant increase from the company’s initial target of $15 billion. Underwriters have been granted a 30-day window to purchase an additional 31.6 million shares if market demand warrants it. The capital raise comes as Intel executes a turnaround strategy anchored by its 18A and upcoming 14A process nodes, aiming to expand its third-party foundry business and compete for dominance in the artificial intelligence infrastructure buildout.
Financial performance has shown renewed momentum, with second-quarter revenue of $16.1 billion comfortably topping analyst consensus estimates of $14.42 billion. Non-GAAP earnings per share were $0.42, doubling expectations, although GAAP net loss was $2.16 per share due to a $12.5 billion mark-to-market charge related to the CHIPS Act agreement. The Data Center and AI segment grew 59% to $6.3 billion, while the Client Computing Group rose 13% to $8.9 billion.
Management highlighted improved manufacturing efficiency as a key driver of growth, noting that 18A node yields have climbed from approximately 65% to 85%. CFO Dave Zinsner attributed the outperformance to higher factory yields and faster production cycle times. Looking ahead, Intel guided for third-quarter revenue of $15.8 billion to $16.8 billion and non-GAAP EPS of $0.38, both above consensus estimates.
Intel’s stock has surged 373.85% over the past year, trading between $97.52 and $99, though it remains below its 52-week high of $142.35. Wall Street consensus is a 'Hold' rating with a mean price target of $113.97. The mega-raise underscores the capital intensity of Intel’s foundry ambitions, even as it navigates execution risks and shareholder dilution concerns.
