Intel Lowers 2025 Expense Target After Altera Sale

• Intel cuts its full-year operating expense forecast following the sale of a majority stake in Altera, signaling a shift toward tighter cost control.

Expense Forecast Adjusted Amid Strategic Changes

Intel has revised its 2025 adjusted operating expense target to $16.8 billion, down from the previously projected $17 billion. The change reflects the deconsolidation of its programmable chip division, Altera, which was sold to private equity firm Silver Lake. Investors responded positively, with Intel shares rising nearly 4% on the news, offering a brief recovery after a challenging financial period. The company posted an $18.8 billion loss in 2024, marking its first annual deficit since 1986.

Former CEO Pat Gelsinger had invested heavily in expanding Intel’s contract-manufacturing operations, which contributed to the losses. Under new leadership, CEO Lip-Bu Tan is implementing operational streamlining and management restructuring to stabilize finances. The U.S. government’s recent conversion of grants into a 10% equity stake adds another layer to Intel’s evolving ownership structure. These developments suggest a broader effort to reposition the company amid industry shifts and internal challenges.

Altera Transaction Reshapes Financial Outlook

Intel finalized the sale of 51% of Altera on September 12, valuing the business at $8.75 billion—significantly below the $17 billion acquisition price from 2015. Silver Lake acquired its majority stake for an equity value of approximately $3.3 billion, factoring in debt and cash components. As part of Intel’s portfolio earlier this year, Altera reported $816 million in revenue and a 55% gross margin, alongside $356 million in operating expenses. The divestment is expected to reduce Intel’s cost burden and improve its balance sheet.

Despite the sale, Intel has maintained its 2026 operating expense target at $16 billion. The company also announced plans to reduce its workforce by over 20% compared to last year, signaling a commitment to leaner operations. Tan has emphasized stricter financial discipline, stating that the era of “blank checks” is over. These measures reflect a shift toward more conservative fiscal management following years of aggressive expansion.

Investor Sentiment and Sector Implications

The expense reduction and Altera sale have helped restore some investor confidence, particularly after a period of mounting costs and strategic uncertainty. Intel’s stock performance suggests that shareholders view the changes as a step toward recovery, even if challenges remain. The company’s position in the semiconductor market continues to evolve, with increased competition and shifting demand patterns influencing its strategy. Analysts will be watching closely to see how Intel balances innovation with cost control in the coming quarters.

Intel’s restructuring comes at a time when the broader chip industry is undergoing significant transformation. Private equity involvement in semiconductor assets, such as Silver Lake’s stake in Altera, reflects growing interest in specialized technologies. The programmable chip segment remains vital for applications in data centers, telecommunications, and embedded systems. Intel’s decision to retain a minority stake may allow it to benefit from future growth while reducing operational exposure.