Intel is signalling a turnaround in financial discipline to the market by lowering its forecast for adjusted operating expenses for 2025 to $16.8 billion. The revision, although small, was positively received by investors, with the company’s shares gaining nearly 4%. The change is a direct result of the finalisation of the sale of the majority stake in Altera.
Discipline after years of investment
The decision to cut projected spending is part of the company’s new strategy, which is undergoing restructuring under CEO Pat Gelsinger. The company is feeling the effects of a multi-billion dollar investment in capacity development and an IDM 2.0 strategy to compete with Asian giants in contract manufacturing.
These ambitious plans have put a heavy strain on the company’s balance sheet, leading to significant losses in recent years.
The new management announces an end to ‘blank cheques’ and a tightening of cost discipline. One of its manifestations is the reduction in staff announced for this year by more than a fifth compared to last year.
Altera off balance sheet
A key part of the optimisation is the deconsolidation of the programmable chip (FPGA) business, Altera. In September, private equity fund Silver Lake finalised the acquisition of a 51% stake in the company.
The deal, which valued Altera at $8.75 billion, allowed Intel to take the operating costs generated by this segment off its balance sheet. It is worth recalling that Intel paid almost $17 billion for Altera in 2015, which shows how the valuation of this business has changed.
In the first half of 2025, Altera, still part of Intel, generated $816 million in revenue with a gross margin of 55% and operating expenses of $356 million.
Maintaining a minority stake allows Intel to benefit from Altera’s potential growth while easing the burden on its own finances. The operating cost target for 2026 remains unchanged at $16 billion.
