Mad Money host Jim Cramer has been a vocal fan of shares of Intel (NASDAQ:INTC | INTC Price Prediction). And in spite of the red-hot rally that’s in the rearview, I do think Mr. Cramer is right on the money to stay aboard the rollercoaster ride as its first big wild move lower unfolds.
Either way, Mr. Cramer referred to Intel as his “favorite stock” in the market, pounding the table on the turnaround, even amid volatility. Of course, one could argue that the easy money has already been made in the historic comeback play. But, for the most part, I do think Jim is right on the money when he praises the leadership team (they pretty much pulled off a miracle) and the advancement of its foundry business.
In many ways, Intel’s turnaround is something that ought to be studied closely.
It’s historic amid an unprecedented AI revolution with a new CEO who took the helm when shares were at multi-year lows. It felt like Intel was no longer relevant when Lip-Bu Tan stepped into the firm, which, at the time, felt like a sinking ship with considerable cash bleed and miles to go to catch up in the AI chip race, one that only seemed to get more intense over time. Fast forward to today, and Intel is no longer a throw of the dice; its foundry business has gone from a gamble to a more certain winning bet.
Wall Street analysts are pounding the table, too
Even after the meteoric rise in the shares (up 367% in just a year), a slew of Wall Street analysts are growing increasingly bullish on the name and its path forward. You can’t blame them, given the exceptional progress the firm has made in the past few quarters alone.
As to whether shares of Intel can eclipse $200 per share (that’s the Wall Street-high right now) remains the big question. Today, the target seems a tad far-fetched, but, then again, who envisioned shares surpassing $100 per share just a year ago? Not many, I’d imagine.
Of course, just because Intel’s foundry business is looking up doesn’t mean there won’t be bumps in the road. Delays can happen, and if they do, there’s really no telling what the reaction will be, especially since many investors punching their ticket at over $100 per share have fairly high expectations from a firm that’s pretty much back in the race after staying stuck in the back of the pack for so long.
Is it time to get into Intel stock as shares take a dive?
While Intel isn’t going to be everyone’s cup of tea, I am inclined to view the latest pullback in the name as more of a buying opportunity than anything else. For Intel, the tough money has already been spent, and as the foundry really has a chance to flex its muscles, all while AI compute demand heads to even more explosive levels, my guess is that Intel could prove too cheap at these levels.
It’s not just Mr. Cramer and a wave of sell-side analysts who are believers. The husband of Congresswoman Nancy Pelosi also reportedly purchased call options in the firm just a few weeks ago. Given the U.S. government’s vested interest in Intel’s success and the deal momentum it’s experienced of late, I certainly wouldn’t want to bet against the firm, just because the semiconductor scene is in a bit of a troubled spot.
Arguably, Intel may deserve a free pass since it’s one of the very few capable players in the foundry scene. Any way you look at it, I think there’s a strong case for having Intel in one’s top three semi names to consider as the trade runs out of steam in the coming sessions.
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