To The Moon

I. Fundamentals: Two Engines Determine Valuation

The core focus of this earnings report is whether the two main threads — Server CPU and Foundry — can deliver a turning point.

1. Server CPU: The Core Engine for Earnings Growth
Although declining PC sales pose a headwind, Intel is offsetting this with stronger CPU pricing power and AI demand. More critically, Agentic AI is expected to significantly boost server CPU demand, with the GPU/CPU ratio projected to drop from 2× to 1.1–1.4×.

Leveraging the strong stickiness of x86 in the enterprise sector, Intel is well-positioned to become a key beneficiary of enterprise-grade Agentic AI. Server CPU revenue is projected to grow at a 28% compound annual growth rate (CAGR) through 2030.

2. Foundry Business: A Turning Point Has Emerged
Front-end manufacturing (18A/14A nodes) and back-end advanced packaging (EMIB) have already attracted interest from giants like Google, NVIDIA, and Meta. The foundry business is expected to begin scaling in 2027, generating $4.6 billion in revenue, and further increase to $10 billion in 2028.

3. Conference Call Focus Points
Foundry progress, server CPU demand assumptions, capex outlook, and 18A/14A process updates. Note: TSMC has already raised its capex guidance, and it's possible Intel will also significantly increase its capex — this would be a long-term positive signal but could also pressure free cash flow in the short term.

II. Volatility Estimates and Key Price Levels

Based on Monday's pre-market price of $95.04, ATM (at-the-money) options imply a weekly move of approximately ±14.95%, corresponding to a range of roughly $80–$110 (roughly not breaking above the MA60 nor below the MA120).

However, note that the stock has already run up to around $105, so the actual trading range should be adjusted higher.

Combined with options data from July 21 (stock price basis $105.45, IV 108%):

• Post-earnings binary outcome: A breakout above 110 on volume → run to 120, or a "sell-the-news" drop back to 100 → 95.

• Bullish catalyst (foundry / AI orders / guidance beat): Break above 110 → triggers Gamma chasing on the pile of OTM 120 Calls, with upside to 115 → 120; but 120 is a heavily defended ceiling.

• In-line / slight beat: Pulls back toward the max-pain level of 100, oscillating in the 100–110 range, with IV crush hurting options buyers.

• Miss / weak guidance: Breaks below the 97.8 pivot point → negative Gamma accelerates, downside to 95 → 90; with the stock already up 8%+, there is more room for a pullback.

INTC is being pinned by positive Gamma at 105, building energy for bulls betting on a post-earnings run to 120. But the rally is already priced in, the max-pain level at 100 is pulling lower, and near-the-money hedges are appearing.

With IV at 108%, options are extremely expensive. Post-earnings is likely to see a sharp one-directional move — either breaking 110 to continue toward 120, or a "sell-the-news" reversal back to 100/95. Buying naked options (whether Calls or Puts) offers extremely poor risk/reward at this IV level.

III. Block Trade Interpretation: Bullish and "Capped" Signals Coexist

There is a divergence in block trades this time — don't just look at one side:

• Leaning bullish: Yesterday, someone bought 16,500 contracts of the 8/21-expiry 110 Call$INTC 20260821 110.0 CALL$ , with a notional value of $15.82 million, betting on a post-earnings push to 120.

• Leaning capped / not too bullish: There were large sell orders for the 8/21-expiry 120 Call $INTC 20260821 120.0 CALL$ , indicating a view that the stock won't close above 120 after earnings.

• Leaning range-bound: There was also a combo spread block selling the 8/21-expiry 125 Call $INTC 20260821 125.0 CALL$ and selling the 95 $INTC 20260821 95.0 PUT$ Put (a Short Strangle), betting the stock will oscillate within the 95–125 range (referencing TSMC's post-earnings performance).

Combined interpretation: Bulls are buying the 110 Call to bet on upside, but more money is selling Calls to cap the upside at 120/125 and selling the 95 Put to provide a floor. The market's mainstream expectation is actually that upside is possible but breaking 120 is difficult — the stock will most likely trade in a wide range and then get hit by IV crush, rather than a mindless rally.

IV. Three Scenarios and Response Strategies (Examples, Not Recommendations)

Scenario 1: Range-Bound (90–110) — Highest Probability
No major earnings surprises, IV rapidly collapses from the 108% high (IV crush). An extremely high IV environment is a golden scenario for options sellers:

• Consider selling a Short Strangle or Iron Condor: Sell Puts below the 90 support level, and sell Calls above 115–120. For an Iron Condor, use long legs to cap both tails, harvesting IV crush + time decay.

• The aforementioned Short Strangle (125 Call / 95 Put) is a ready-made play for this scenario.

• If willing to take assignment, sell Puts below 90 $INTC 20260724 90.0 PUT$ : take discounted shares on a breakdown, or collect premium if it holds.

• ⚠️ Risk: Extremely high IV indicates the market expects a large move. Naked shorting both legs carries significant risk. Given the pre-earnings rally expectations, be cautious with selling Calls — always define risk and use small position sizes.

Scenario 2: Break Above 110 (Strong Bullish Catalyst)
A volume-driven breakout. With IV at 108%, chasing a long single-leg Call directly would be severely hurt by IV crush:

• Consider a Bull Call Spread, e.g., buying the 110 Call and selling the 130 Call, to lock in costs and mitigate IV risk (note the 120 Call wall overhead is a ceiling).

• A more conservative approach is to wait for a breakout above 110 and a retest/confirmation before going with the trend, avoiding false breakouts.

• Seller's approach: Sell Puts in the 100–105 $INTC 20260724 100.0 PUT$  range to collect premium, betting the stock won't fall back below those levels.

Scenario 3: Break Below 90 (Miss / Weak Guidance)
With the stock already up 8%+, there is more room for a pullback:

• Consider a Bear Put Spread to go with the trend, e.g., buying the 90 Put and selling the 80 Put, controlling costs to short the catch-down move (80 has huge Put OI, serving as a strong support reference).

• Don't rush to buy the dip — negative Gamma will amplify downside. Wait for stabilization and for IV to decline, then sell Puts near the strong support level of 80 to take assignment, and combine with a wheel strategy to roll and collect premiums.

⚠️ Disclaimer: The above is an observational and strategy illustration based on publicly available options data, intended for educational and informational purposes only. It does not constitute any investment advice. Investing involves risk, and options are derivative products. Please assess your own risk tolerance before making any investment decisions.