The Warrant That Keeps the Foundry Inside IntelNarrow moat

Intel (INTC) — moat facet

If Intel ever gives up control of its factories, Washington can buy 241 million more shares at $20, which makes a split all but impossible.

The government deal contains a clause that shapes Intel's strategy more than the shares do. The government received warrants to buy up to 241 million additional shares at $20.00 each, exercisable only if Intel ceases to own at least 51% of its foundry business1.

Foundry warrantShares under warrant241 millionExercise price$20.00TriggerIntel owns under 51% of FoundryShare price, 24 Sep 2026$127.39Value on exerciseabout $26bnIntel Form 10-K FY2025; stockanalysis; value calculated
A poison pill written by the government.

That makes a full separation of the factories expensive. At $127.39 a share2, the warrants would be worth roughly $26 billion on exercise3, a cost that would fall on Intel's other shareholders if the company spun off or sold control of Intel Foundry.

The clause answers a question many investors had asked: whether Intel should split into a chip designer and a contract manufacturer, as AMD did with GlobalFoundries. The government's terms make the answer, for now, no.

That is consistent with Intel's own plan. It committed in 2026 to completing Intel 14A4 and says it plans to continue manufacturing the majority of its products in its own factories5. The factories and the products will stay together.

The effect is to lock in a strategy that Intel's leadership had already chosen. The 10-K describes the foundry as offering wafer fabrication, advanced packaging, chiplet integration and design services to outside customers6, a business model that needs the factories under Intel's control and the product groups as anchor customer. Separation would give the factories freedom from Intel and cost them their only large customer.

The warrant protects the factories and limits the options. What would matter is a change in the government's position on the warrant; without one, a split that some shareholders want remains priced out of reach.

Moat trajectory: Holding steady

The warrant stands; Intel has committed to keeping and expanding the factories.

The number that tests this moat
Moat Explorer calc
Value of the foundry warrants at the current price
About $26bn (241M shares, $127.39 less $20.00 strike)

The cost of separating the factories; a rising share price makes a split ever more expensive for other shareholders.

How it's calculated: 241 million warrant shares multiplied by ($127.39 share price less the $20.00 exercise price).
Source: Moat Explorer calculation from Intel filings ↗
⚠ Threats to the moat
⚠ THREAT 01
The Split Investors Wanted Is Priced Away
Splitting Intel's profitable chip business from its loss-making factories would now hand the US government about $26 billion of shares.
References
  1. ReportedThe government received warrants to buy up to 241 million additional shares at $20.00 each, exercisable only if Intel ceases to own at least 51% of its foundry business.
    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 ↗
  2. ReportedAt $127.39 a share, the warrants would be worth roughly $26 billion on exercise, a cost that would fall on Intel's other shareholders if the company spun off or sold control of Intel Foundry.
    Intel (INTC) market data - $127.39 a share at the close on 24 September 2026, market cap $669.37B, 52-week range 29.23-142.35, analyst target $116.37. — September 2026 · publ. 24 September 2026 · source ↗
  3. Moat Explorer calcAt $127.39 a share, the warrants would be worth roughly $26 billion on exercise, a cost that would fall on Intel's other shareholders if the company spun off or sold control of Intel Foundry.
    Moat Explorer calculation from Intel's reported figures ($ 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.
  4. ReportedIt committed in 2026 to completing Intel 14A and says it plans to continue manufacturing the majority of its products in its own factories.
    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 ↗
  5. ReportedIt committed in 2026 to completing Intel 14A and says it plans to continue manufacturing the majority of its products in its own factories.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
  6. ReportedThe 10-K describes the foundry as offering wafer fabrication, advanced packaging, chiplet integration and design services to outside customers, a business model that needs the factories under Intel's control and the product groups as anchor customer.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
Sources
Generated September 25, 2026