4. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
According to the Financial Times, Intel Corporation (NASDAQ:INTC) has been hit by major departures, including Stuart Pann, who was appointed head of the foundry business in 2023, and Shlomit Weiss, a key designer who left in April. Combined with the recent decline in stock prices, Jim Cramer noted that these challenges are making it harder for CEO Pat Gelsinger to execute his turnaround strategy at Intel Corporation (NASDAQ:INTC).
“The Financial Times reports that Intel has been rocked by key defections, including Stuart Pann who was named head of the foundry business in 2023. Shlomit Weiss, a key designer, departed in April. Coupled with stock price declines, the deck looks increasingly stacked against CEO Pat Gelsinger’s turnaround plans.”
Intel Corporation (NASDAQ:INTC) is a strong investment for 2024 due to its strategic transformation, strong market presence, and growth potential in key areas. Under CEO Pat Gelsinger, Intel Corporation (NASDAQ:INTC) has restructured by focusing on core semiconductor and foundry services, which has boosted investor confidence and solidified its leadership in U.S. chip manufacturing. Intel Corporation (NASDAQ:INTC) holds a significant market share in data centers and PCs and is making strides in the AI chip market, which NVIDIA Corporation (NASDAQ:NVDA) currently dominates.
Intel Corporation (NASDAQ:INTC)’s expansion in foundry services, supported by partnerships with Marvell Technology Group Ltd. (NASDAQ:MRVL) and NVIDIA Corporation (NASDAQ:NVDA) and the development of the Intel 18A process node, enhances its growth potential. Additionally, Intel Corporation (NASDAQ:INTC)’s $10 billion cost-reduction plan is expected to improve efficiency, competitiveness, and profitability.
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.”
