Cramer’s Morning Thoughts: 20 Stocks to Watch

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7. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Investors: 75

Rumors are circulating about Intel Corporation (NASDAQ:INTC), with reports suggesting QUALCOMM, Incorporated (NASDAQ:QCOM) may be eyeing a friendly takeover, while Apollo Global Management (NYSE:APO) is considering a $5 billion equity investment in the company. The latest Morning Thoughts post highlighted the recent events related to Intel Corporation (NASDAQ:INTC).

“Intel M&A rumors are swirling with Qualcomm reportedly interested in a friendly takeover and Apollo Global Management reportedly willing to make a $5 billion equity investment in the chipmaker.”

Intel Corporation (NASDAQ:INTC) presents a promising investment opportunity due to its strategic moves and growing involvement in emerging technologies, despite recent obstacles. Intel Corporation (NASDAQ:INTC) is well-positioned to take advantage of the artificial intelligence (AI) boom through its development of AI-focused chips like the “Gaudi” processors, which offer a cost-effective alternative to Nvidia’s dominance. Intel Corporation (NASDAQ:INTC) plans to incorporate AI into its traditional CPU offerings, aligning with the rising demand for AI solutions across industries.

In addition, Intel Corporation (NASDAQ:INTC) is improving its manufacturing capabilities by advancing its Panther Lake processors and making progress on its Intel 4 and Intel 3 nodes. Intel Corporation (NASDAQ:INTC) also reported that its 20A and 18A processes are on track, which should lead to better chip efficiency and performance, strengthening its competitiveness in the semiconductor market.

To boost profitability, Intel Corporation (NASDAQ:INTC) is implementing cost-cutting measures, targeting over $10 billion in savings by 2025. These efforts include reducing its workforce and optimizing capital allocation. This cost discipline is expected to improve margins as Intel Corporation (NASDAQ:INTC) scales its new manufacturing processes.

In Q2 2024, Intel Corporation (NASDAQ:INTC) reported $12.8 billion in revenue, a slight year-over-year drop, but sequential improvement. Strong growth was seen in its Foundry, Mobileye, and FPGA segments, though profitability lagged with gross margins at 38.7% and earnings per share of just $0.02. Despite this, Intel Corporation (NASDAQ:INTC)’s Q3 2024 guidance suggests stable revenue, with a long-term focus on regaining market leadership.

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