Capex: Down to $17.7 Billion, Then Back UpThin moat

Intel (INTC) — moat facet

Intel cut capital spending by $7.5 billion in 2025 and then raised it again, because customers suddenly wanted more chips than it could make.

Intel's capital spending shows how the plan has swung. Gross capital expenditures were $25,122 million in 2024 and $17,672 million in 20251. After capital-related government incentives and partner contributions, net capital spending was $10,515 million and $11,204 million2.

Capital spending ($M)25,122Gross 202410,515Net 202417,672Gross 202511,204Net 2025Intel FY2025 results release; net is after government incentives and partner contributions
Partners and subsidies paid for a third or more.

The cut was reversed within months. In April 2026 management forecast capital spending to be flat on 20253; in July it raised the outlook to more than $20 billion for 2026 and said 2027 would be significantly above that4. Demand for Intel's products had outrun its capacity.

The spending is enormous against cash flow. Operating cash flow was $9,697 million in 20255, and adjusted free cash flow was negative $1,612 million6. In the second quarter of 2026 adjusted free cash flow was negative $8,419 million7, largely because of the Apollo buyback booked in partner contributions.

Partners and subsidies fill the gap. Capital-related government incentives were $1,577 million in 2025 and partner contributions $4,891 million8.

The same swing appears in the balance sheet. At the end of 2025 Intel had $9.1 billion of capital expenditure commitments for 20269, before the July increase. The first-half figure was modest: gross capital spending was $2,652 million in the second quarter10, so the raised full-year outlook implies a much heavier second half.

Capital spending at this level only pays if it produces products customers buy. The ratio to watch is operating cash flow against gross capital spending, about 0.55 in 202511; a figure above 1 would mean the factories are finally paying for themselves.

Moat trajectory: Widening

The 2026 outlook rose to more than $20bn, with 2027 significantly higher.

The number that tests this moat
Moat Explorer calc
Operating cash flow to gross capital spending
About 0.55 (2025: $9,697M against $17,672M)

Whether the factories fund themselves; a ratio above 1 would mean they do.

How it's calculated: Operating cash flow divided by gross capital expenditures, from Intel's FY2025 results release.
Source: Moat Explorer calculation from Intel filings ↗
⚠ Threats to the moat
⚠ THREAT 01
Adjusted Free Cash Flow Negative Three Years Running
Intel has spent more than it generated for three years running and plans to spend more.
References
  1. ReportedGross capital expenditures were $25,122 million in 2024 and $17,672 million in 2025.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  2. ReportedAfter capital-related government incentives and partner contributions, net capital spending was $10,515 million and $11,204 million.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  3. ReportedIn April 2026 management forecast capital spending to be flat on 2025; in July it raised the outlook to more than $20 billion for 2026 and said 2027 would be significantly above that.
    Intel Q1 2026 earnings call prepared remarks (CEO and CFO). — Q1 2026 · publ. 23 April 2026 · source ↗
  4. ReportedIn April 2026 management forecast capital spending to be flat on 2025; in July it raised the outlook to more than $20 billion for 2026 and said 2027 would be significantly above that.
    Intel Q2 2026 earnings call prepared remarks (CEO and CFO). — Q2 2026 · publ. 23 July 2026 · source ↗
  5. ReportedOperating cash flow was $9,697 million in 2025, and adjusted free cash flow was negative $1,612 million.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  6. ReportedOperating cash flow was $9,697 million in 2025, and adjusted free cash flow was negative $1,612 million.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  7. ReportedIn the second quarter of 2026 adjusted free cash flow was negative $8,419 million, largely because of the Apollo buyback booked in partner contributions.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  8. ReportedCapital-related government incentives were $1,577 million in 2025 and partner contributions $4,891 million.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  9. ReportedAt the end of 2025 Intel had $9.1 billion of capital expenditure commitments for 2026, before the July increase.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - financial statements and notes: results, capital, government and partner transactions, restructuring and tax. — FY2025 · publ. 23 January 2026 · source ↗
  10. ReportedThe first-half figure was modest: gross capital spending was $2,652 million in the second quarter, so the raised full-year outlook implies a much heavier second half.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  11. Moat Explorer calcThe ratio to watch is operating cash flow against gross capital spending, about 0.55 in 2025; a figure above 1 would mean the factories are finally paying for themselves.
    Moat Explorer calculation from Intel's reported figures ($ millions unless stated). Segment margins 2025: Client Computing 9,317 / 32,228 = 28.9% (2024: 11,594 / 33,346 = 34.8%; Q2 2026: 2,343 / 8,877 = 26.4%); Data Center and AI 945 / 15,980 = 5.9% (2023), 1,414 / 16,125 = 8.8% (2024), 3,422 / 16,919 = 20.2% (2025), 2,474 / 6,262 = 39.5% (Q2 2026); Intel Products 12,739 / 49,147 = 25.9%. Revenue shares 2025: client 32,228 / 52,853 = 61.0%; data center 16,919 / 52,853 = 32.0%; together 49,147 / 52,853 = 93.0%. Client growth Q2 2026: 8,877 / 7,871 - 1 = 12.8%. Foundry: internal revenue 17,826 - 307 = 17,519, 17,519 / 17,826 = 98.3%; external share 307 / 17,826 = 1.7%; operating losses 7,083 + 13,291 + 10,318 = 30,692. Intel share of x86 server revenue Q1 2026: 100 - 46.2 = 53.8%. Revenue 2025 against 2021: 52,853 / 79,024 - 1 = -33.1%. Headcount 82.3 / 124.8 - 1 = -34%. Government stake 433.3M x $127.39 = about 55.2 bn; purchase funds 5.7 + 3.2 = 8.9 bn. Warrants 241M x (127.39 - 20.00) = about 25.9 bn. Nvidia stake 215M x 127.39 = about 27.4 bn; 215 / 4,994 = 4.3%. Backers 11.0 + 8.9 + 5.0 + 2.0 = 26.9 bn. Apollo 14.2 - 11.0 = 3.2 bn. Mobileye 100% - 23% = 77%. Net debt end-2025: (2,499 + 44,086) - (14,265 + 23,151) = 46,585 - 37,416 = 9,169; 27 June 2026: (1,988 + 48,549) - (12,874 + 16,853) = 50,537 - 29,727 = 20,810. Shares: diluted 4,530 / 4,090 - 1 = 10.8% (2021-2025); outstanding June 2026 5,043 against 4,090 diluted in 2021 = 23% more. China share of revenue 12,694 / 52,853 = 24.0% (2025); 15,532 / 53,101 = 29.2% (2024); China 12,694 / 22,961 - 1 = -44.7% (2021-2025). Gross margin 43,815 / 79,024 = 55.4% (2021); 21,711 / 54,228 = 40.0% (2023). R&D 16,546 - 13,774 = 2,772; R&D share of revenue 13,774 / 52,853 = 26.1% (2025), 16,546 / 53,101 = 31.2% (2024). Operating cash flow to gross capital spending 9,697 / 17,672 = 0.55. All Other external revenue: 54,228 - 32,305 - 15,980 - 547 = 5,396 (2023); 53,101 - 33,346 - 16,125 - 159 = 3,471 (2024); 52,853 - 32,228 - 16,919 - 307 = 3,399 (2025). Trailing EPS to June 2026: -0.06 - (-0.19 - 0.67) + (-0.73 - 2.16) = -2.09. Market value 669.37 / 86.48 = 7.7 times end-2024; share price 127.39 / 29.23 = 4.4 times the 52-week low - capital, ownership and valuation. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Intel's Forms 10-K, 10-Q, results releases, prepared remarks and market data; operands shown in the source line.
Sources
Generated September 25, 2026