Jim Cramer put Intel Corporation (NASDAQ:INTC) and Micron Technology, Inc. (NASDAQ:MU) at the top of his technology stock list during the September 17 episode of Mad Money, as he said:
Yesterday, I said that people would buy tech. We got that in spades today. I continue to recommend the cybersecurity stocks, and I’d add Okta to the list because rogue agents cannot be stopped unless we can identify them first. That’s Okta’s job. I still think that Intel, as I tell club members, is the best stock in show, and Micron, number two… Both their products are in short supply. I just bought some Micron, candidly.
Intel’s Product Recovery Meets a Costly Foundry Buildout
Intel Corporation’s second-quarter revenue rose 25% year over year to $16.1 billion, while Data Center and AI revenue increased 59% to $6.3 billion. Intel Products generated $4.8 billion of operating income in the second quarter, up from $2.7 billion a year earlier, while Data Center and AI operating income increased $1.8 billion to $2.5 billion.
The company said client supply constraints are expected to ease in the second half of 2026, while industry-wide constraints affecting Data Center and AI products are expected to persist into 2027.
Micron’s Margins Show the Value of Tight Supply
Micron Technology, Inc.’s fiscal third-quarter GAAP operating margin reached 80.4%, up from 67.6% in the prior quarter and 23.3% a year earlier. Its non-GAAP operating margin was 81.2%. Operating cash flow reached $25.4 billion. The company also said DRAM inventories were “very tight and below 120 days.”
Intel CEO Lip-Bu Tan offered a broader view of the memory shortage on September 15. He said capacity was “very limited,” that “many projects are being delayed because they cannot secure enough memory,” and that memory prices had risen five to seven times. He noted, “It actually happened, and the situation will get worse.”
Bear Case is About Execution and Normalization
Intel Corporation’s financial risk is the gap between improving product economics and the cost of its manufacturing strategy. Intel Foundry generated $5.8 billion of revenue in Q2 although roughly $5.5 billion came from intersegment transactions and just $293 million was external revenue. The segment posted a $2.1 billion operating loss, compared with a $3.2 billion loss a year earlier.
Micron Technology, Inc. faces the opposite side of the memory cycle. Its 80.4% GAAP operating margin is more than three times the year-earlier level, leaving earnings exposed to a deterioration in memory pricing or supply conditions. At the same time, it spent $7.1 billion on net capital expenditures in the fiscal third quarter, adding capacity while the market remains tight.
Hedge Funds Increased Exposure to Both Stocks
According to Insider Monkey’s tracking of more than 1,000 hedge funds, 138 hedge funds held Intel in Q2, up from 112 in Q1. Micron was held by 184 hedge funds, compared with 154 in the first quarter. As for the short interest, Intel’s was roughly 3.0% to 3.3% of float, while Micron’s was approximately 2.6% of float.
The companies offer different exposure to the semiconductor cycle. Intel Corporation is seeing stronger demand for its products while rebuilding its manufacturing business, while Micron Technology, Inc. is benefiting from tight memory supply and pricing. Intel needs better yields, higher factory utilization and eventually more external foundry revenue to continue narrowing its large Foundry loss, while Micron needs tight memory conditions to persist as it invests heavily in additional supply.
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