We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Intel's Revival Ahead After SoftBank's $2 Billion Investment
Intel’s (INTC - Free Report) revival as a leading chipmaker has gained traction following Tuesday’s announcement that SoftBank (SFTBY - Free Report) had taken a nearly 2% stake in the company worth $2 billion.
Furthermore, the Trump administration is reportedly considering a 10% stake in Intel, which could make the U.S. goverment the company’s largest shareholder in a broader effort to strengthen domestic chipmaking capabilities.
To do so, the government would convert funds that Intel received through the CHIPS Act grants into equity, with Intel receiving roughly $11 billion in grants for commercial and military chip production.
With SoftBank helping to lead the large stake investments in Intel, investors may be starting to believe that the chip giant’s revival is ahead. As one of the market’s top performers this month, Intel shares have surged +18% in August, to largely outpace the broader indexes, with Nvidia (NVDA - Free Report) and other AI infrastructure-related stocks starting to lose some of their blazing steam.
Image Source: Zacks Investment Research
SoftBank’s Strategic Investment in Intel
Known for its bold bets on tech and innovation, it’s noteworthy that Intel CEO Lip-Bu Tan has deep ties with SoftBank after previously serving on the multinational holding company's board of directors from 2020-2022.
Intel and SoftBank also have collaboration efforts in Saimemory, a startup focused on stacked DRAM (Dynamic Random-Access Memory) chips for AI applications.
Seeing Intel as a critical player in expanding AI chip production, SoftBank is heavily invested in artificial intelligence, having a $500 billion data center project, deemed “Stargate” with OpenAI and Oracle (ORCL - Free Report) .
This strategic move also positions SoftBank as a key influencer in global chip supply chains, becoming one of Intel’s largest shareholders and deepening its semiconductor portfolio as the majority owner of ARM Holdings (ARM - Free Report) while holding stakes in Nvidia and Taiwan Semiconductor (TSM - Free Report) as well.
Why SoftBank’s Lifeline to Intel is So Important
With SoftBank’s investment providing a financial lifeline, this will allow Intel financial flexibility to stabilize its operations after posting a $18.8 billion loss in 2024, the chipmaker's first unprofitable year since 1986. Attributing to last year’s loss, Intel’s foundry division has struggled to secure major clients after losing Nvidia as a customer to Taiwan Semiconductor.
Without these large-scale customers or further outside investments, Intel may have to cancel or halt its mega semiconductor factory in Ohio (Ohio One). Notably, Ohio One is one of the most ambitious tech infrastructure projects in U.S. history, which is another reason the Trump administration has planned to assist Intel, seeing the mega-factory as a way to reduce the nation's reliance on foreign chipmakers.
Tracking Intel’s Outlook & Balance Sheet
Showing signs that its revival may be ahead, Intel’s annual earnings are expected to swing back into the black in fiscal 2025 to $0.15 per share, compared to an adjusted loss of -$0.13 a share last year. Reassuringly, Intel’s FY26 EPS is projected to rebound to $0.68.
On the top line, Intel’s total sales are currently slated to dip over 1% this year, but are projected to rebound and rise 4% in FY26 to $54.2 billion. However, FY26 sales projections would still be well away from Intel’s multi-year peaks of $79 billion in 2021.
Image Source: Zacks Investment Research
Regarding Intel’s financial health, the company has a solid balance sheet, having $192.52 billion in total assets at the end of Q2 compared to $86.76 billion in total liabilities. Plus, Intel has over $21 billion in cash & equivalents as shown in the quarterly chart below.
Image Source: Zacks Investment Research
Monitoring Intel’s P/S Valuation
The price-to-sales ratio (P/S) may be a better way to track Intel's value to investors at the moment rather than the P/E ratio. In this regard, INTC does trade near the preferred level of less than 2X forward sales, with the S&P 500 at 5.5X, and many chip peers such as Nvidia and Taiwan Semiconductor still trading at hefty premiums to these levels.
Image Source: Zacks Investment Research
Bottom Line
SoftBank’s investment in Intel certainly signals confidence in the chip giant’s turnaround and future relevance. That said, after such a sharp rally this month, Intel stock lands a Zacks Rank #3 (Hold), although investors are starting to get more reassurance for what is hopefully a continued rebound at some point.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Intel's Revival Ahead After SoftBank's $2 Billion Investment
Intel’s (INTC - Free Report) revival as a leading chipmaker has gained traction following Tuesday’s announcement that SoftBank (SFTBY - Free Report) had taken a nearly 2% stake in the company worth $2 billion.
Furthermore, the Trump administration is reportedly considering a 10% stake in Intel, which could make the U.S. goverment the company’s largest shareholder in a broader effort to strengthen domestic chipmaking capabilities.
To do so, the government would convert funds that Intel received through the CHIPS Act grants into equity, with Intel receiving roughly $11 billion in grants for commercial and military chip production.
With SoftBank helping to lead the large stake investments in Intel, investors may be starting to believe that the chip giant’s revival is ahead. As one of the market’s top performers this month, Intel shares have surged +18% in August, to largely outpace the broader indexes, with Nvidia (NVDA - Free Report) and other AI infrastructure-related stocks starting to lose some of their blazing steam.
Image Source: Zacks Investment Research
SoftBank’s Strategic Investment in Intel
Known for its bold bets on tech and innovation, it’s noteworthy that Intel CEO Lip-Bu Tan has deep ties with SoftBank after previously serving on the multinational holding company's board of directors from 2020-2022.
Intel and SoftBank also have collaboration efforts in Saimemory, a startup focused on stacked DRAM (Dynamic Random-Access Memory) chips for AI applications.
Seeing Intel as a critical player in expanding AI chip production, SoftBank is heavily invested in artificial intelligence, having a $500 billion data center project, deemed “Stargate” with OpenAI and Oracle (ORCL - Free Report) .
This strategic move also positions SoftBank as a key influencer in global chip supply chains, becoming one of Intel’s largest shareholders and deepening its semiconductor portfolio as the majority owner of ARM Holdings (ARM - Free Report) while holding stakes in Nvidia and Taiwan Semiconductor (TSM - Free Report) as well.
Why SoftBank’s Lifeline to Intel is So Important
With SoftBank’s investment providing a financial lifeline, this will allow Intel financial flexibility to stabilize its operations after posting a $18.8 billion loss in 2024, the chipmaker's first unprofitable year since 1986. Attributing to last year’s loss, Intel’s foundry division has struggled to secure major clients after losing Nvidia as a customer to Taiwan Semiconductor.
Without these large-scale customers or further outside investments, Intel may have to cancel or halt its mega semiconductor factory in Ohio (Ohio One). Notably, Ohio One is one of the most ambitious tech infrastructure projects in U.S. history, which is another reason the Trump administration has planned to assist Intel, seeing the mega-factory as a way to reduce the nation's reliance on foreign chipmakers.
Tracking Intel’s Outlook & Balance Sheet
Showing signs that its revival may be ahead, Intel’s annual earnings are expected to swing back into the black in fiscal 2025 to $0.15 per share, compared to an adjusted loss of -$0.13 a share last year. Reassuringly, Intel’s FY26 EPS is projected to rebound to $0.68.
On the top line, Intel’s total sales are currently slated to dip over 1% this year, but are projected to rebound and rise 4% in FY26 to $54.2 billion. However, FY26 sales projections would still be well away from Intel’s multi-year peaks of $79 billion in 2021.
Image Source: Zacks Investment Research
Regarding Intel’s financial health, the company has a solid balance sheet, having $192.52 billion in total assets at the end of Q2 compared to $86.76 billion in total liabilities. Plus, Intel has over $21 billion in cash & equivalents as shown in the quarterly chart below.
Image Source: Zacks Investment Research
Monitoring Intel’s P/S Valuation
The price-to-sales ratio (P/S) may be a better way to track Intel's value to investors at the moment rather than the P/E ratio. In this regard, INTC does trade near the preferred level of less than 2X forward sales, with the S&P 500 at 5.5X, and many chip peers such as Nvidia and Taiwan Semiconductor still trading at hefty premiums to these levels.
Image Source: Zacks Investment Research
Bottom Line
SoftBank’s investment in Intel certainly signals confidence in the chip giant’s turnaround and future relevance. That said, after such a sharp rally this month, Intel stock lands a Zacks Rank #3 (Hold), although investors are starting to get more reassurance for what is hopefully a continued rebound at some point.