GF Securities: Intel expands its follow-on offering scale to $20 billion, management's subscription signals confidence, maintains a $136 target price.

GF Securities maintains a "Buy" rating on Intel, with a $136 price target, noting that the company’s equity financing sends a positive signal. Intel expanded its share offering size from the original planned $15 billion to $20 billion; institutional demand reportedly exceeded $100 billion, with an offering price of $95, and the overallotment option has been fully exercised. Intel CEO Lip-Bu Tan and his family subscribed approximately $12 million worth of shares at the offering price. GF Securities believes this demonstrates management’s confidence in the company’s outlook and is expected to support fiscal 2027 capital expenditures. The firm projects Intel’s foundry business will reach break-even in Q4 2027, with margin leverage fully realized in 2028. It notes steady progress in 18A process node yield and external customer expansion, particularly with Apple, while Intel’s EMIB customer base continues to grow, with Google and AWS both advancing related collaborations. GF Securities maintains its forecast that 18A yield will hit around 80% in Q2 2026, adding that Clearwater Forest (CWF) has entered mass production ramp-up, with Apple’s high-volume production of 14A being a key focus. If the foundry business’s break-even is delayed to 2028, the main reason is expected to be increased new investment requirements. For the EMIB business, GF Securities raised Intel’s backend segment revenue forecasts for 2027 and 2028 to $1.1 billion and $7 billion respectively, driven primarily by AWS’s Trainium3 expected to adopt EMIB-T in 2027, and Google’s Humufish/Triggerfish ramping up production from H2 2027 to 2028. GF Securities also forecasts that AWS and Microsoft’s ASIC products may adopt EMIB in 2028. Intel has also secured support from Unimicron and plans to produce silicon capacitors in-house.