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Intel (INTC) has just completed a US$20b follow on equity offering of 210,526,315 common shares at US$95 each. This capital raise directly affects shareholder dilution and future funding flexibility.
See our latest analysis for Intel.
The follow on offering has arrived alongside a sharp pullback in Intel’s share price, with the stock down 6.58% over the last day but still carrying a very strong year to date share price return of 145.52% and a one year total shareholder return of 282%. This reflects how quickly sentiment has shifted toward its AI and foundry plans.
If Intel’s rapid rerating has you thinking about where else capital could flow within AI infrastructure, this is a good moment to scan the 56 AI infrastructure stocks
Intel stock remains sharply higher over the past 12 months, even after the recent pullback and the dilution from the US$20b capital raise. Does that recent step up in valuation still offer a comfortable trade-off between risk and reward for new buyers?
Most Popular Narrative: 80.7% Undervalued
According to the most followed Intel narrative, a fair value of $500.93 compared with the last close of $96.69 implies a very large valuation gap. That view leans heavily on Intel’s position in x86 software and its US foundry footprint.
compared to ARM, x86 does face an overhead penalty due to hypervisor translation on the assumption that ARM has been natively built. However the majority of applications are not natively built (aside from webpages), which would mean ARM would suffer a significant emulation penalty in terms of performance. additionally even with a natively compiled binary for ARM, x86 could still come out on top due to ARM being less cache efficient as the same application compiled for ARM generates larger code objects which could lower cache hit rate (depending on application)
Read the complete narrative.
Want to see why this narrative argues Intel’s x86 ecosystem and foundry scale can support such an aggressive fair value, and which growth, margin and future multiple assumptions sit underneath it?
Result: Fair Value of $500.93 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this Intel narrative could be challenged if x86 software advantages erode faster than expected or if the US foundry build out faces cost or execution setbacks.
Find out about the key risks to this Intel narrative.