Intel raises $20 billion in stock sale as rally cuts dilution cost
Intel announced a $20 billion upsized share offering at $95 per share, a move made cheaper for existing shareholders by the company’s 165% stock surge this year.
Intel Corp. said it will sell about 211 million new shares at $95 each, generating roughly $20 billion in fresh capital. The offering, which could be expanded by an additional 31.6 million shares underwriters’ option, may ultimately bring in up to $23 billion.
The proceeds are intended to fund the chipmaker’s expanded spending on factories, equipment and other long-term projects, although the company did not specify how much will be allocated to AI-related construction.
"Customers continue to signal a strong and sustainable demand environment, driven by unprecedented investment in AI compute," Intel said in its announcement.
Selling new shares normally dilutes existing holdings, but Intel’s share price, up about 165% this year, means the same $20 billion can be raised with roughly 80% fewer shares than would have been required at last year’s $20.47 price paid by the U.S. government.
The stock’s rise also follows gains by peers in the AI sector, with AMD up about 120% and Nvidia up 17% over the same period. Despite the rally, Intel’s shares have slipped about 31% from a June 22 peak, erasing more than $200 billion in market value.
The U.S. government purchased $8.9 billion of Intel stock last year at a fixed price of $20.47 per share as part of a strategy to preserve advanced chip manufacturing domestically. Similar fixed-price investments were made by SoftBank and Nvidia around the same time.