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What has to happen in Intersegment eliminations

Model as of

This page changes Intersegment eliminations inside the complete INTC model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

INTC forward model
Horizon
Consolidated fair value $100.06 all other verticals held in this portfolio case
Final-quarter revenue −$11.17B -32% of company revenue
Explicit segment contribution −$460M EBITDA less segment capex, before corporate items

The CEO's own framing taken at face value across all four lines he names - CPU franchise, ASICs, advanced packaging and wafer foundry network - rather than only the CPU and server lines the disclosure can evidence. It needs external foundry and advanced packaging to become material, and $293M of quarterly external revenue does not yet support that; it is here to make explicit what the base case deliberately does not reach. It takes revenue to $131.2B across the four quarters to 2031 Q2, more than double the $62.7B this model projects for 2026, and even then reaches $100.06 a share only with a 13.5x exit multiple and a 9% discount rate. What it does not do is justify the price on disclosed economics: the extra revenue is assumed, not contracted, and no 14A customer commitment has been quantified.

Intersegment eliminations

Basis quarter−$5.48B
Final quarter−$11.17B
Final revenue mix-32%

Not a business line but the contra-line that makes the model reconcile: it removes Intel Foundry's internal wafer sales to Intel Products on consolidation. It is the only shape that reproduces reported consolidated revenue with zero residual in all ten disclosed quarters, and it is projected as a coupled ratio of Intel Foundry revenue rather than as an independent growth line.

Last four quarters
2025 Q3 −$4.23B Reported
2025 Q4 −$4.34B Reported
2026 Q1 −$5.25B Reported
2026 Q2 −$5.48B Reported
Elimination of Intel Foundry intersegment revenueA small residual from other intersegment activity, $5M in 2026 Q2
Sequential growth +1.7%/qtr decaying toward +1.5% +1.73%, which is Intel Foundry's +2.0% less 0.27 points, so eliminations fall to 0.948 of Foundry revenue.
Intersegment eliminations

Latest: −$11.17B (2031Q2E)

Period Value
2024Q1 −$4.38B
2024Q2 −$4.28B
2024Q3 −$4.32B
2024Q4 −$4.31B
2025Q1 −$4.70B
2025Q2 −$4.42B
2025Q3 −$4.23B
2025Q4 −$4.34B
2026Q1 −$5.25B
2026Q2 −$5.48B
2026Q3E −$5.68B
2026Q4E −$5.90B
2027Q1E −$6.11B
2027Q2E −$6.34B
2027Q3E −$6.57B
2027Q4E −$6.81B
2028Q1E −$7.06B
2028Q2E −$7.32B
2028Q3E −$7.58B
2028Q4E −$7.85B
2029Q1E −$8.14B
2029Q2E −$8.43B
2029Q3E −$8.73B
2029Q4E −$9.04B
2030Q1E −$9.37B
2030Q2E −$9.70B
2030Q3E −$10.05B
2030Q4E −$10.41B
2031Q1E −$10.78B
2031Q2E −$11.17B

Assumptions & reasoning

  • The ratio of eliminations to Intel Foundry revenue sat near 1.00 through 2025 Q3 and has fallen to 0.950 as external foundry revenue ramped from $22M in 2025 Q2 to $293M in 2026 Q2.
  • The growth rate here is deliberately 0.27 points below Intel Foundry's in both the first and terminal quarter, which glides the ratio from 0.948 in 2026 Q3 to 0.901 by 2031 Q2 - the assumed terminal 0.90 - without an independent driver.
  • The EBITDA margin is negative on a negative revenue line and so contributes positive EBITDA: the disclosed $254M of eliminations operating income on $(5,477)M of eliminated revenue is (4.64)%.
  • Modelled as an independent growth line rather than as a coupled ratio, this vertical would silently break the consolidated revenue total by hundreds of millions a quarter.
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