Off The Call: INTC (+4%)...

Research evidence excerpt

Off The Call: INTC (+4%)...

ly to meet customer demand (again, across CPU, Foundry and other products)

is the key concern.

• The key driver of revenue upside was largely ASP (mix shift to higher-end & like-for-like price increases to offset cost

inflation); Q3 client revenue expected to be roughly flat, as are margins (inventory charge relief offset by Panther Lake/

Granite Rapids still being below corporate average margins). Target is to sustain gross margins "comfortably in the 40s"

every quarter, with improvement expected as 18A yields mature

• Supply growth is back-end loaded in Q3, implying a meaningful Q4 revenue step-up, though Intel will still be supply-

constrained and will not fully catch up to demand. Key bottlenecks extend beyond wafers to substrates, T-glass, and

memory).

• ASIC business is approaching a ~$2b run rate today, with a path to ~$4b in the near term; TAM viewed as $100B+, with

Intel's IP portfolio, advanced packaging, and design services as key differentiators

The key question throughout the call was why the stock continued to fade, at one point being up only ~2% from close. The after-

market is of course fickle, but this was a big move. I initially blamed LBT saying they’re ramping 14A “for internal products”

(versus past filings saying they would only continue the 14A buildout with external customer commitments); but overwhelmingly

investors said that the node sounds good/demand will be there, and they instead blamed the formal disclosure that the team is

open to issuing new equity. Others were also frustrated that they guided for capex “across all of our business units” rather than

just foundry, complaining that INTC is less competitive in agentic and/or they are simply less excited about CPUs (and also they