3. Intel Corporation (NASDAQ:INTC)
Value of Greenlight Capital‘s 13F Position: $15.94 million
Number of Hedge Fund Shareholders: 75
Hedge funds have grown quite a bit more bullish on Intel Corporation (NASDAQ:INTC) since the middle of 2019, as ownership of the stock has risen by 47% among their ranks. Einhorn’s activist fund is among the newest funds to take a stake in the chipmaker, buying 309,500 shares during Q4.
Intel Corporation (NASDAQ:INTC) has laid out bold plans to not only transform itself into a cutting edge chipmaker, but to also transform Europe into a leading producer of semiconductors. The company is investing tens of billions of dollars towards those goals, building new plants in Ohio, as well as investing billions in Germany, France, and Ireland to bolster every aspect of its chip design, manufacturing, R&D, and packaging.
Third Point Management praised the progress Intel Corporation (NASDAQ:INTC) has made towards its turnaround efforts in the fund’s Q4 2021 investor letter, though the fund also unloaded its Intel stake during the quarter. Here is what the fund had to say:
“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.”
