Intel shares drop 5% after announcing $15 billion offering to support AI growth

Shares of Intel Corporation fell 5.24% to $96.32 on the Nasdaq on Monday, August 10, after the semiconductor designer and manufacturer announced a $15 billion underwritten public offering of common stock.

At the last check, the stock was trading 4.13% lower at $97.45. During Monday's session so far, Intel shares have moved in the range of $98.96 to $96.31, exchange data showed.

The decline in Intel's stock came after the company announced the $15 billion common stock offering to support what it described as strong customer demand for artificial intelligence compute.


"Customers continue to signal a strong and sustainable demand environment, driven by unprecedented investment in AI compute. Progress in emerging areas including physical AI, purpose-built silicon, advanced packaging and external wafers represent significant growth opportunities for Intel," the company said in a release.

Intel said it intends to use the net proceeds from the offering for general corporate purposes, which may include capital expenditures and working capital.

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The offering is intended to further enable Intel to pursue the growth opportunities ahead while maintaining a strong balance sheet and its commitment to an investment-grade rating, the company said.

Intel also expects to grant the underwriters a 30-day option to purchase up to an aggregate of $2.25 billion of additional shares of common stock at the public offering price, less underwriting discounts.

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. are acting as joint book-running managers for the proposed offering.

Intel said it has filed a registration statement on Form S-3, including a preliminary prospectus, with the US Securities and Exchange Commission for the offering.

Founded in July 1968 by Robert Noyce and Gordon Moore, Intel Corporation is an American technology company headquartered in Santa Clara, California. The company designs and manufactures central processing units (CPUs) and semiconductor chips and develops semiconductor technologies.

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