2. Intel Corp. (NASDAQ:INTC)
Volume: 48.896 million
Average Volume (3-Month): 80.49 million
Number of Hedge Fund Holders: 75
Intel Corp. (NASDAQ:INTC) is a multinational corporation and technology company that designs, manufactures, and sells computer components and related products for business and consumer markets, such as semiconductors, and integrated circuits, among others. It’s known for its x86 microprocessors, which are used in a wide range of computers and devices.
The company is focused on using its chips to power AR devices. Earlier this year, its Japanese division partnered with 14 domestic firms to establish a research body focused on automating back-end chipmaking processes as Japan and the US work to strengthen their chip supply chains.
Intel Corp. (NASDAQ:INTC) has received up to $3 billion in direct funding under the CHIPS and Science Act for the Secure Enclave program, in addition to an already $8.5 billion federal grant. The funding for the former focuses on projects for US defense, while the latter has gone into semiconductor manufacturing and research projects in Arizona, New Mexico, Ohio, and Oregon.
In Q2, it introduced its new Xeon 6 processors with performance cores and AI accelerators, primarily targeted toward enterprise AI systems for high-performance, cost-effective AI infrastructure. The Intel Xeon 6 processor offers double the performance of its predecessor, while the Intel Gaudi 3 AI Accelerator is optimized for large-scale generative AI.
Despite that, the company recorded a 0.9% year-over-year revenue decline in this quarter, with the total revenue amounting to $12.83 billion. To combat that, the company announced it was cutting 15% of the 125,000-strong workforce and suspended dividends to cut spending and streamline the company. Even with layoffs, the inventory problem won’t be resolved soon because the company has 137 days of inventory, much higher than the industry average of 90 days.
Its strategic focus on reducing costs and improving operational efficiency positions it well for future growth. Despite recent challenges, its strong market presence in semiconductor chip manufacturing and its focus on developing innovative technologies for smart devices suggest a promising outlook for the company.
Ariel Global Fund stated the following regarding Intel Corporation (NASDAQ:INTC) in its Q2 2024 investor letter:
“Alternatively, several positions weighed on performance. One of the world’s largest semiconductor chip manufacturers by revenue, Intel Corporation (NASDAQ:INTC), underperformed in the period on news of a longer than expected turnaround in profitability within the Foundry business. This was exacerbated by disappointing near-term guidance due to a weakening demand environment signaling an extended replacement cycle. We view the quarter as a temporary trough that should dissipate as we see signs of a cyclical recovery for personal computers (PCs) and central processing units (CPUs), driven by the Windows 11 upgrade. In our view, the market is overlooking the progress Intel is making to advance its manufacturing process. Not to mention, the company’s efforts to serve as a viable second source foundry partner of leading-edge silicon. We believe the separation of the design and manufacturing businesses will be a key catalyst in unlocking improved financial performance while also enhancing the competitiveness of the foundry business.”
