Semiconductor giants Intel Corporation (NASDAQ:INTC) and Micron Technology, Inc. (NASDAQ:MU)’s shares have ended the week as part of yet another historic bloodbath for the semiconductor sector. Both have lost roughly 12% over the past five days amidst a painful rout for the semiconductor industry that saw the close 9.9% lower during the same day. Cramer, who has been one of Intel’s strongest proponents, discussed Intel and Micron in his morning appearance on the 12th:
“When you look at that chart, are those great companies? Yes. Are those companies that are for sale? Every one of them was on sale everyday. And we should include by the way, cause I’ve been recommending Intel to the club, because Intel was great and then Intel has been terrible. And I think that it’s important David to point out, that these were the market leaders. I mean Micron apparently upped its buyback, or said it was going to up its buyback. Nothing. Nothing is moving these stocks. And yet you can move, ServiceNow with a feather.
“Well look, there’ll come a time when we’ll see the actual earnings, and I think they’re going to be very impressive. But right now, people are saying, look, this is overdone. And they’ve been saying that. I happen to think having spent a lot of time with Micron in Boise. That Micron’s going to have a really good quarter. But sometimes between now and the quarter you have endless selling. Intel has just been, straight down, from 115. And yet I understand that business is quite good.
“But people care ServiceNow’s business is quite good more than they care about Intel.”
While Cramer discussed both, only one stock featured on our list of the 10 Most Promising Technology Stocks to Buy Right Now – a list that looks extensively at analyst ratings to determine which stocks are hot and which are not.
As the stock bloodbath continued, Cramer briefly discussed Micron in a tweet:
“Micron bucking the SK Hynix curse for the first time….”
With both firms being chip companies, their narrative is similar on a fundamental level but differs in the specifics. Starting from Intel, the debate is about whether the firm will be able to carve out a larger portion of the AI pie for itself, given that its strengths lie with CPUs as opposed to GPUs, which are powering the current AI wave. Additionally, it also depends on the firm’s foundry business, which is aiming to compete with Taiwan’s TSMC in the global contract chip manufacturing industry.
On the AI front, Intel’s second quarter came with good news as the firm’s data center and AI business (DCAI) which captures the impact of CPU sales to data centers, saw revenue jump by 59% annually to touch $6.3 billion. Additionally, the foundry business’s revenue jumped by 31% to $5.8 billion to indicate that the firm was firing well on both fronts.
Yet, the chip business is quite capital intensive and Intel has to invest if it’s to carve out a space for itself in the industry. The impact of focusing on the growth is clear as well, since first half capex sat at $6.1 billion while management outlined that full year capex would sit at $20 billion. Not to mention, foundry operating losses were $2 billion and the firm recorded a $11 billion GAAP net loss in the quarter primarily due to a $12.53 billion non-cash mark-to-market charge tied to escrowed shares under the U.S. CHIPS Act agreement.
Looking at Micron, while for Intel the debate is about the role of CPUs in the agentic AI space, for Micron, it’s about the sustainability of demand and the potential of high prices to remain as mega players SK hynix and Samsung bring additional capacity online and China’s CXMT pushes to produce more memory chips. Cramer’s tweet about Micron is unsurprising, as he had commented in August that US would “rue” the day it let it in the markets. For his complete remarks, check out Jim Cramer Says US Markets Will Regret Letting SK hynix Inc. (NASDAQ:SKHY) In.
Starting from the bullish view, Micron’s core data center revenue surged by 10 times to touch $18 billin in its fiscal Q4, gross margin touched 87% and management outlined that 75% of fiscal year 2027 were already committed. The third bit is particularly relevant, as it raises the chance of order shifts if Micron is unable to bring additional capacity online – a costly endeavor which could lead to tailwinds in case of a memory price downturn. FY26 capex sat at $27 billion while the shares are down by 27% since their June peak.
As for the valuation, Intel’s forward P/E of 63 over Micron’s 7 means that the former is very richly valued. Cramer disagrees with the valuation as he has remarked that it should be higher. Read Micron (MU) Is A Stock Jim Cramer Thinks Could Go From ~$1,000 To ~$2,000 Per Share. While, as Cramer discusses in the piece, Micron’s P/E suggests cyclicality, the ratio pencils in an earnings yield of 14%, which offers quite a hefty premium over risk-free assets. As for Intel, the picture is opposite as aggressive growth over little immediate earnings output is priced in. Looking at hedge funds, they’re focused on the memory demand as opposed to CPU demand since 138 funds disclosed a stake in Intel in Q2 compared to 184 for Micron, according to Insider Monkey’s data.
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This article is originally published at Insider Monkey.
