Intel: BofA sees $20B raise fueling foundry and server CPU growth

Intel: BofA sees $20B raise fueling foundry and server CPU growth

Wed, August 12, 2026 at 10:33 PM GMT+3 2 min read

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Intel Corp (NASDAQ:INTC, XETRA:INL) priced roughly $20 billion in new equity this week, a move analysts at BofA Securities said reflects growing confidence in the chipmaker's foundry business rather than a defensive balance-sheet play.

The bank estimates the offering, which includes a 15% greenshoe option, will dilute earnings per share by about 4-5% on the higher share count.

Even so, analysts called the raise a net positive, pointing to it as a leading indicator of management's rising conviction in Intel's foundry ambitions.

BofA noted the capital raise lines up with a recent step-up in capital expenditure for internal customers and continued progress on the company's 14A process node. The bank expects further capex increases if Intel lands additional external foundry customers across 18A-P, 14A and its EMIB-T advanced packaging offering, with capex growth eventually tracking the 30%-plus annual industry-wide wafer fab equipment growth reported by ASML.

Analysts see Intel eventually capturing 8-10% of a wafer foundry total addressable market they project at $380 billion by calendar 2030, along with 25-30% of a roughly $20 billion market for 2.5D/3D advanced packaging.

Combined, BofA estimates those positions could support earnings power of $6 or more per share.

On the products side, BofA pointed to server CPU average selling prices that climbed 43% year over year to roughly $1,200, citing Mercury second-quarter 2026 data. The bank expects Intel to sustain double-digit growth in both units and ASPs through calendar 2030 as the server CPU market expands toward $220 billion from about $60 billion currently.

BofA also flagged room for continued operating margin expansion toward 38-40%-plus, driven by product ASP gains and foundry operational efficiency, including an expected operating margin breakeven for the foundry segment by the end of calendar 2027, barring new customer wins that could push that timeline further out.

Key risks to the thesis include the pace of 18A and 14A yield progress, ramp execution, and how quickly Intel can secure major external foundry customers, according to BofA.

BofA reiterated its Buy rating on Intel while trimming its price objective to $145 from $160, citing modest EPS dilution from the raise alongside a recent re-rating in AI-compute peer multiples, which have slipped to about 29 times from roughly 31 times previously.

Shares of Intel were up about 4.6% Wednesday afternoon.