Intel upsized its common stock offering to $20 billion from $15 billion, pricing 210.5 million shares at $95 each. The US Commerce Department endorsed the raise but declined to subscribe, while a cornerstone investor has been secured.
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Intel upsizes stock offering to $20 billion with US government backing
Intel priced a $20 billion stock offering at $95 per share, upsized from $15 billion, with US Commerce Department backing.
"My belief of what 'super-successful' means is they are close to signing up one or more major foundry customers," Dan Niles, founder of Satori Fund, said on X. "They need a lot more capacity to ramp it."
The offering of 210,526,315 shares is expected to close Aug. 12, with net proceeds of approximately $19.7 billion. Intel granted underwriters a 30-day option to purchase up to 31,578,947 additional shares. J.P. Morgan, Goldman Sachs, Morgan Stanley and Citigroup served as joint book-running managers.
The raise marks Intel's first public stock offering since 1971 and the second-largest equity refinancing in history after Google. Proceeds will fund AI-related projects including the delayed Ohio chip factory, with capital expenditures projected to exceed $20 billion in 2026.
CEO Lip-Bu Tan called Commerce Secretary Howard Lutnick before announcing the plan, according to Semafor. Lutnick endorsed the raise, but the government decided not to participate in the subscription. The Commerce Department holds a 9.9% stake in Intel with a 375% paper return since investing a year ago.
Intel has secured a cornerstone investor to support the offering, according to people familiar with the matter. CFO David Zinsner hinted at the capital raise on the July 23 earnings call, noting that "if we're super successful, which we're driving to, we may need to tap the capital markets."
The foundry business is exceptionally capital intensive, and Intel's push to become a leading contract chipmaker requires billions in new fab capacity. The company has been competing with Taiwan Semiconductor Manufacturing Co. for external customers while also supplying its own products.
Intel shares fell 4.06 percent on Monday to close at $97.52 before rising 0.19 percent on Tuesday. The stock has gained 164.28 percent year-to-date and 388.83 percent over the past year, though it declined 11.22 percent over the last month.
The offering dilutes the government's stake but demonstrates Intel's ability to raise capital from private markets. Tan's handling of Washington relations and two years of sustained business growth are his most important achievements since taking over. The endorsement from Lutnick marks a shift from the stalled relationship between Intel and Washington during former CEO Pat Gelsinger's tenure.
The successful placement strengthens Intel's competitive position in the AI semiconductor race against Nvidia and AMD. Investors will watch for announcements of major foundry customers, which Niles expects "are near."
This article is for informational purposes only and does not constitute investment advice.
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