December 29, 2025
The Event
Nvidia has taken a $5B stake in Intel.
Why This Changes Everything for Intel
1. Technical Validation (The "Good Seal of Approval")
The biggest bear case against Intel was that their 18A (1.8nm) process wouldn't yield. Nvidia—the most demanding chip designer in the world—just bet $5B that it will. This effectively kills the "Foundry Failure" narrative.
2. Liquidity Bridge
Intel was burning cash to build fabs in Ohio and Magdeburg. This $5B non-dilutive injection (equity purchased from treasury/warrants) bridges the gap to 2026 free cash flow positivity without needing to issue junk bonds.
3. Utilization Rates
Nvidia has committed to "significant" capacity at the Ohio site starting Q2 2026. This guarantees high utilization rates for the new fabs from Day 1, solving the "Empty Fab" risk.
Price Target Revision
We are upgrading our conviction level.
- Previous Target: $28 (Neutral)
- New Target: $38 (Overweight)
- Catalyst: Short squeeze on "Foundry Failure" shorts.