Intel Stock Faces 87 Million-Share Risk After SoftBank Deal
Intel investors face new uncertainty as SoftBank revealed losses tied to its 87 million shares in the chipmaker, raising questions about potential future selling pressure.
The Japanese investment giant SoftBank has already raised $7.4 billion against its entire stake in Intel, according to a November 10 disclosure. The company entered prepaid forward contracts in August, which allow investors to receive cash upfront in exchange for settling the contracts later, potentially by delivering shares. These arrangements cover roughly 1.6% of Intel's outstanding shares.
SoftBank reported a fiscal second-quarter net loss of 1.12 trillion yen, or approximately $7 billion, impacted by investment losses and costs related to U.S. data center procurement, alongside a decline in Intel shares. The investment originally paid $2 billion for its Intel stake in 2025, which had surged to $10.5 billion by September 30 before falling to approximately $5.1 billion as Intel's stock declined.
Intel stock decline
Intel shares fell from $120.23 in September to $58.13 on November 10, cutting the stake's market value significantly. SoftBank reported approximately $2 billion in derivative losses and $1.7 billion in Intel valuation losses during the September quarter. The broader technology sell-off hit Intel particularly hard, with shares plunging approximately 30% on October 30 after the company forecast weaker fourth-quarter revenue and warned about continued PC demand weakness.
Wall Street outlook
Despite the sell-off, Wall Street remains cautiously optimistic about Intel's recovery. According to S&P Global analyst estimates, 49 analysts have an average 12-month price target of $91.12, with a consensus Hold rating. However, several banks recently lowered their expectations, with Citi reducing its target from $130 to $100 and JPMorgan cutting its forecast to $80.
SoftBank's financing arrangement does not directly change Intel's long-term business prospects, but investors should watch for further disclosures about the contracts, particularly settlement dates and potential share deliveries. For a lasting recovery, Intel must demonstrate stronger demand and improve its cash flow, as a potential 87 million-share overhang could make an already volatile recovery more difficult.
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