Intel (INTC) stock is finally getting the limelight it deserves. INTC has climbed 143% year-to-date (YTD), as investors increasingly bet that the chipmaker's long-awaited turnaround is finally showing up in its financials. The latest $20 billion stock offering adds another major piece to that story, giving Intel more capital to expand manufacturing just as demand for AI infrastructure is stretching semiconductor supply.
Let’s dig into what is in store for investors.
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www.barchart.com The $20 Billion Is Really About Intel's Manufacturing Comeback
Recently, Intel announced that it has priced an upsized offering at $95 per share, selling 210.526 million shares and raising $20 billion, up from the previously announced $15 billion offering. The company intends to allocate the proceeds toward potential capital investments and working capital needs.
In the Q2 earnings call, management had already raised the 2026 capital-spending outlook to more than $20 billion, well above what the company had anticipated at the start of the year. Intel is also locking in equipment orders, accelerating clean-room construction, and securing substrates and memory. For 2027, the company expects capital expenditures to rise above 2026 levels, with most of the spending going toward the company's U.S. manufacturing network. While this $20 billion is a significant capital boost, investors should be aware that this capital raise also caused dilution. However, if Intel’s foundry and product businesses scale as planned, the dilution may ultimately look less concerning in front of the earnings the company generates.
Intel Delivered Its Strongest Growth in More Than 15 Years
The encouraging part is that Intel’s financial performance is improving at the same time while it continues to spend aggressively. In the second quarter, Intel generated $16.1 billion in revenue, which marked the seventh consecutive quarter of exceeding the company's guidance. CEO Lip-Bu Tan also described the company as delivering its “strongest revenue growth in more than 15 years.” AI-related businesses increased over 70% year-over-year (YoY), accounting for around 70% of total revenue. This is a big deal for a company that was previously considered a laggard in the AI race.
Intel's Data Center and AI business generated $6.3 billion in Q2 revenue, up an impressive 59% YoY. Server growth was the strongest in Intel's history, while Xeon 6 became one of the company's fastest-ramping products. Purpose-built silicon revenue nearly tripled from the prior-year quarter. Intel also launched Xeon 6+, its first server-class product on 18A, and expanded rack-scale and disaggregated inference work with SambaNova and Foxconn (FITGF).
Furthermore, the Client Computing and Physical AI Group, or CCPG segment, generated $8.9 billion of revenue in Q2. AI PC revenue now represents two-thirds of client revenue, while Edge deployments account for roughly 10% of CCPG revenue. The company has brought 18A to full scale with more than 400 Series 3 designs across consumer and commercial products.
What’s more, profitability numbers improved as well. Higher revenue, better manufacturing yields, and higher average selling prices from mix and pricing actions all contributed to a higher-than-expected adjusted gross margin of 41.8%. Intel also reported adjusted earnings per share of $0.42, compared to a loss of $0.10 in the year-ago quarter. The chipmaker ended the quarter with roughly $30 billion in cash and short-term investments. Intel also believes that as AI moves from training toward inference and agentic systems, demand for general-purpose server CPUs will continue to rise.
Foundry Is Still the Real Make-or-Break
Intel’s Foundry business is where the $20 billion will matter the most because the company is trying to transform its manufacturing operation from a largely internal supplier into a major external foundry. The idea is to make chips for other companies so that it can compete with TSMC (TSM), which is the preferred manufacturing partner for many leading chip designers. However, this is a capital-intensive transition, as it will require advanced factories, equipment, clean rooms, and new process technologies.
In Q2, Intel Foundry generated $5.8 billion in Q2 revenue, up 31% YoY. However, the majority came from manufacturing for Intel itself, while external foundry revenue totaled only $293 million. Intel has made progress to build a standalone foundry business, but there is still a long way to go, as Intel Foundry still posted a $2.1 billion operating loss in Q2. This is why Intel needs to keep investing. The company’s next major milestone is Intel 14A, with risk production planned for 2027 and a high-volume ramp committed for 2028. So, the $20 billion is giving Intel enough financial firepower to support this transition.
Is INTC Stock a Buy Now?
No doubt, INTC stock faces dilution from the $20 billion offering, and the foundry business still generates substantial losses; its turnaround story is no longer just a hope. However, a transition of this scale will take time, and investors with patience might benefit from holding onto this AI stock.
On the Street, analysts rate INTC stock a consensus “Hold,” as well. Of the 45 analysts covering the stock, nine rate it a “Strong Buy,” one says it is a “Moderate Buy,” 33 say it is a “Hold,” and two rate it a “Strong Sell.” The average target price of $113.87 implies INTC can climb 28% from current levels. Plus, the high price estimate of $200 suggests an upside potential of 125% over the next 12 months.
www.barchart.com On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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