⚠ The Escrow That Turned a Rally Into an $11 Billion LossModerate threat

Intel (INTC) — threat to the moat

Intel lost $11 billion in the second quarter of 2026 on paper because its share price rose.

Some of the shares Intel agreed to issue to the government are held in escrow and released over time, and they are accounted for as a derivative liability. Its fair value was $15.6 billion at 27 June 2026, against $2.7 billion at the end of 20251. The increase was charged to earnings.

Q2 2026 ($M)1,796Operating income-12,529Escrowed share loss-11,033Net loss attributableIntel Q2 2026 results release
A rally that produced a loss.

The result was a quarter that looked disastrous and was not. In the second quarter of 2026 Intel earned an operating profit of $1,796 million2, but recorded losses on the mark-to-market of escrowed shares of $12,529 million3 and a net loss attributable to Intel of $11,033 million, or $2.16 a share4. Non-GAAP earnings per share were $0.425.

The effect runs backwards: the better the shares perform, the worse the GAAP results. About 143 million shares remained in escrow at 27 June 20266, so the exposure continues until they are released.

The escrow is being released gradually. About 7 million shares were released in the second quarter of 2026 and 13 million in the first half7, leaving about 143 million8. The first quarter carried a smaller version of the same effect9. Until the escrow is empty, Intel's reported earnings will move against its share price.

GAAP net income will be unreadable while the escrow lasts, so the figure to follow is operating income, $1,796 million in the second quarter10.

References
  1. ReportedIts fair value was $15.6 billion at 27 June 2026, against $2.7 billion at the end of 2025.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
  2. ReportedIn the second quarter of 2026 Intel earned an operating profit of $1,796 million, but recorded losses on the mark-to-market of escrowed shares of $12,529 million and a net loss attributable to Intel of $11,033 million, or $2.16 a share.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  3. ReportedIn the second quarter of 2026 Intel earned an operating profit of $1,796 million, but recorded losses on the mark-to-market of escrowed shares of $12,529 million and a net loss attributable to Intel of $11,033 million, or $2.16 a share.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  4. ReportedIn the second quarter of 2026 Intel earned an operating profit of $1,796 million, but recorded losses on the mark-to-market of escrowed shares of $12,529 million and a net loss attributable to Intel of $11,033 million, or $2.16 a share.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  5. ReportedNon-GAAP earnings per share were $0.42.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  6. ReportedAbout 143 million shares remained in escrow at 27 June 2026, so the exposure continues until they are released.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
  7. ReportedAbout 7 million shares were released in the second quarter of 2026 and 13 million in the first half, leaving about 143 million.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
  8. ReportedAbout 7 million shares were released in the second quarter of 2026 and 13 million in the first half, leaving about 143 million.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
  9. ReportedThe first quarter carried a smaller version of the same effect.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
  10. ReportedGAAP net income will be unreadable while the escrow lasts, so the figure to follow is operating income, $1,796 million in the second quarter.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
Sources
Generated September 25, 2026