Intel's $20 billion stock sale at $95, first since 1971, left buyers underwater before the October 29 report
Intel raised $20 billion at $95 a share in August, its first public sale since 1971, and closed October 23 at $86.96, leaving the chief executive's own purchase about $846,000 underwater. Thursday's third-quarter report must set 2027 capital spending, and no 14A customer has published an order.
Vincent Jiang · 3 min read
The chief executive bought at the offering price
On August 11 Intel+1.13% — Intel, up 1.13 percent today priced its first public share sale since its 1971 listing: 210,526,315 shares at $95, raising $20 billion after an upsizing from $15 billion 1. Lip-Bu Tan, Intel's chief executive, bought 105,263 shares at that same $95 through a family trust the same day, lifting his holding to 1,314,669 shares 2. At the October 23 close of $86.96, 8.5% under the offering price and far off the September 24 close of $127.39, his roughly $10 million purchase shows a paper loss of about $846,000 2.
What the $20 billion bought in the second quarter
Second-quarter results show both halves of the trade. Data Center and AI revenue rose 59% year on year to $6.26 billion at a 39.5% operating margin, on the strongest server CPU growth in fifteen years 4. Intel Foundry booked $5.77 billion, but outside customers paid only $293 million of it, against a $2.09 billion operating loss 4.
Intel's custom silicon line, fielded against Broadcom−0.45% — Broadcom, down 0.45 percent today, Marvell+1.75% — Marvell, up 1.75 percent today and Alchip in a market it sizes at $100 billion, runs at $2 billion a year 4. Broadcom sold $16.7 billion of AI semiconductors in a single quarter and guides $21.7 billion for the next 6.
It has also agreed to lend Anthropic$350B — Anthropic, private, latest valuation $350B, the AI lab whose IPO filing disclosed the deal, up to $42 billion against a $125.2 billion five-year lease of Google-designed TPU compute: an undrawn, convertible ceiling for the customer expected to be its largest next year 7. Intel funded its factories with shareholder cash. Broadcom is offering its customer a credit line.
Broadcom's AI silicon quarter dwarfs everything Intel Foundry sells outside
- Estimate
Data
| Value | |
|---|---|
| Broadcom AI semis, FQ4 guide (estimate) | $21.7B |
| Broadcom AI semis, FQ3 | $16.7B |
| Intel Data Center and AI, Q2 | $6.26B |
| Intel Foundry external, Q2 | $0.29B |
Bulls count wafers and a Tesla headline
The bull case is physical. Output of 18A, Intel's newest high-volume process, ran 25% above target last quarter, management says demand exceeds available supply, and 14A is due for risk production in the second half of 2027 45. An October 24 report said Tesla−0.83% — Tesla, down 0.83 percent today has agreed to become a 14A foundry customer, with no chip, volume or date named 8.
The Street has not followed the stock down: the mean target holds at $117.14 1 after cuts to $95 at TD Cowen and $105 at Susquehanna 23, against a new JPMorgan target of $85, below the offering price, on a stock near 50 times forward earnings 32.
Analysts kept targets above $95 while the stock fell below the price Intel sold at
Data
| Value | |
|---|---|
| JPMorgan target | $85 |
| Close, Oct 23 | $86.96 |
| Aug 11 offering | $95 |
| TD Cowen target | $95 |
| Susquehanna target | $105 |
| Street mean target | $117.14 |
The number that decides Thursday
Intel reports after the close on October 29 against its own guidance: revenue of $15.8 billion to $16.8 billion, adjusted earnings of $0.38 a share and a 42% gross margin 12. The figure that decides the stock is 2027 capital spending, after this year's plan was raised to $20 billion and chief financial officer David Zinsner called next year's outlay "up meaningfully" 12.
A big number with no customer revenue attached reopens the selloff that followed the July report 1. Whether that ramp can ship at all was this page's October 21 question; Thursday settles who pays for it 1. Owning Intel into the print is a bet on who pays for 14A 1.
Get Chips by email, free
How AI demand is reshaping chipmakers, memory and the fabs behind them. In our daily email, every weekday.
