Intel equity raise tests chip market optimism

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Intel equity raise and chip market

Highlights

Intel plans to issue at least $15bn in new stock, leveraging recent valuation gains amid expanding AI-related chip demand.
Analysts expect Intel’s foundry revenue to grow from $307mn in 2023 to over $20bn by 2030, with projected capital expenditure peaking at $26bn in 2027.
Intel's current $500bn market capitalization prices in a best-case scenario of $120bn sales and $40bn earnings by 2030, leaving limited margin for execution risk.

Capital raise tied to foundry ambitions

As reported by Financial Times, Intel says it will issue at least $15bn of new stock, taking advantage of a sharp rise in its valuation as enthusiasm around AI spreads beyond graphics processors into the broader chip market.

The U.S. chipmaker has been restructuring under chief executive Lip-Bu Tan, who replaced Pat Gelsinger in March 2025. Since then, Intel has cut headcount by a fifth, sold stakes in subsidiaries, highlighted an alliance with Tesla and, until recently, kept tighter control over capital expenditure.

Intel has not said where the new funds will be spent, but its foundry division appears to be the most likely destination. The business, which makes and packages chips for other companies, generated just $307mn of outside revenue last year, yet some analysts, including Goldman Sachs, believe that figure could exceed $20bn by 2030. Bernstein analysts also expect capital expenditure to reach a record $26bn in 2027 as Intel expands capacity.

Valuation leaves little room for error

AI-related demand has also improved the outlook for the server and data-centre CPU market where Intel operates. Rival AMD recently said it sees that market reaching $220bn by 2030, roughly double an earlier forecast made only a few months before.

That backdrop may improve Intel’s chances of reviving ambitions first pursued under Gelsinger, who had targeted $15bn in outside foundry revenue by 2030. Intel’s shareholder base now includes Nvidia and the U.S. government, a factor that may help nudge potential customers such as Apple and major AI infrastructure groups toward its manufacturing services.

Even so, the company’s current market capitalisation of about $500bn suggests investors are assuming an aggressive earnings recovery. A scenario in which foundry revenue meets Goldman Sachs estimates, data-centre revenue triples by 2030 and PC revenue returns to its 2021 peak would imply about $120bn in sales, and roughly $40bn in earnings after applying a 40% operating margin and tax. On that basis, Intel would still trade at more than 12 times 2030 earnings, putting it alongside major sector peers such as TSMC and AMD.

Our earlier article on JPMorgan’s decision to raise its S&P 500 year-end target to 8,000 explained that stronger-than-expected corporate earnings are reinforcing investor confidence that big tech’s AI spending is starting to translate into financial returns. We also noted the bank’s upward revisions to 2026 and 2027 EPS forecasts, while keeping its valuation multiple unchanged due to interest-rate, geopolitical, and supply-related risks.

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