4. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 72
Market Cap: $197.00 billion
Intel Corporation (NASDAQ:INTC) is a chip-maker based in California which develops computer processors, graphic cards, motherboard chipsets, and other related computing products. Its list of main clients includes HP, Dell and Lenovo. The firm also created the world’s first metal oxide semiconductor, and is behind the x86 microprocessors which are used by most personal computer devices.
In March, Intel Corporation (NASDAQ:INTC) announced that it would invest over €80 billion in the European Union over the next ten years, in order to bring the most advanced tech to Europe and create a next-gen European chip ecosystem, whilst also addressing the requirement for a more diversified and resilient supply chain. Under this plan, €17 billion will be spent towards the development of a semiconductor fab mega-site in Germany, which will also be subsidized by public funding. This site will see construction commence by 2023 and production start by 2027. Intel will also create a new R&D and design hub in France, and invest in various business endeavors in Ireland, Italy, Poland and Spain.
In February, Intel Corporation (NASDAQ:INTC) agreed to acquire Tower Semiconductor for $5.4 billion. The Israeli firm is a leading foundry for analog semiconductor solutions, and its acquisition will help Intel become a major provider of foundry capacity around the world.
Intel Corporation (NASDAQ:INTC) launched a fully vertical, standalone foundry business called Intel Foundry Services (IFS) in March 2021, as part of its vision to become a major provider of semiconductor foundry services in the U.S and Europe. Intel plans to tap into the Foundry business, which will have a $100 billion addressable market by 2025, to diversify semiconductor foundry manufacturing capacity away from Asia to ensure a secure and sustainable supply chain for the United States and the rest of the world.
Intel Corporation (NASDAQ:INTC) saw its revenue for 2021 come in at $79.02 billion, an increase of 1.49% year-over-year. The firm announced in February that it expects year-over-year revenue growth of 5-9% in 2023 and 2024, and sees it increasing to 10%-12% by 2026.
Baupost Group was the top shareholder of Intel Corporation (NASDAQ:INTC) in our database at the end of Q4 2021, with roughly 18 million shares valued at $928.9 million.
Here is what Third Point Management had to say about Intel Corporation (NASDAQ:INTC) in its Q4 2021 investor letter:
“2021 was a highly productive year for Intel‘s new CEO, Pat Gelsinger. Despite the stock’s tepid results, we see a compelling, underappreciated fundamental story. Intel’s “brain drain” – a key part of our thesis when we first sought to help the company confront its long-time underperformance – appears to be reversing. Since joining Intel, Mr. Gelsinger has not only brought back prominent Intel former employees but has also attracted talents from competitors such as AMD, Nvidia, Apple, and, most recently, Micron’s stellar Chief Financial Officer, David Zinsner.
We are encouraged by Intel’s aggressive investment plan, including a recently announced fabrication plant in Ohio and acquisition of Tower Semiconductors. We knew from the start that Intel’s turnaround would be complex and lengthy, and we have been pleased to see Mr. Gelsinger sacrifice near-term earnings for long-term growth.
Finally, after a series of blunders across its PC and Server product lines, Intel is finally receiving good reviews for one of its upcoming processors: Alder Lake. Tom’s Hardware, a preeminent hardware publication, called Alder Lake “a cataclysmic shift in Intel’s battle against AMD’s potent Ryzen 5000 chips.” While this is just one product across a broad lineup, and given it will take time to achieve leadership across them all, we are encouraged by these tangible signs of progress under Mr. Gelsinger’s leadership. With talent returning, an improving product suite, and a willingness to invest for growth, we believe Intel’s prospects have turned the corner. We expect that the company’s upcoming analyst day will be an ideal time for Mr. Gelsinger to articulate the progress he has made and begin to reset expectations for the company.”
