8. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Investors: 75
Jim Cramer reported that Intel Corporation (NASDAQ:INTC)’s struggling shares rose 7% after the company announced plans to separate its manufacturing foundry business into an independent unit with its own board, allowing it to seek outside funding. Additionally, Intel Corporation (NASDAQ:INTC) revealed a partnership with Amazon Web Services to create custom AI semiconductors.
“Embattled Intel shares jumped 7% after the chipmaker late Monday announced plans to turn its manufacturing foundry business into an independent unit. It will have its own board and the potential to raise outside capital. Intel said, separately, that it entered a deal with cloud computing giant Amazon Web Services to produce custom AI semiconductors.”
A bullish view on Intel Corporation (NASDAQ:INTC) is supported by improvements in earnings, advancements in semiconductor technology, and strategic investments in manufacturing. In its latest quarterly report, Intel Corporation (NASDAQ:INTC) reported $12.9 billion in revenue for Q2 2023, largely due to increased demand for its chips, especially in the data center and AI markets.
The introduction of its Intel 4 Manufacturing Process improves product performance and efficiency, helping Intel compete better with rivals like Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA). As demand for AI and data center solutions grows, Intel Corporation (NASDAQ:INTC) is also developing specialized chips, such as the Gaudi and Habana processors, which are expected to boost future revenue.
Additionally, Intel Corporation (NASDAQ:INTC)’s plans to build new manufacturing plants in the U.S. and Europe will strengthen its supply chain and enhance production capacity over the long term. Recent announcements about expanding AI initiatives and updates on manufacturing progress highlight Intel Corporation (NASDAQ:INTC)’s commitment to growth, reinforcing a positive outlook for its recovery and future success in the semiconductor market.
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.”
