During the September 28 episode of Mad Money, Jim Cramer addressed Intel Corporation (NASDAQ:INTC) and its ongoing business transformation, as he said:
Members of the CNBC Investing Club know I’ve been resolute though that there are opportunities like the two stocks that I’ve been recommending now for the last month: Intel and Meta. I know it’s boring when I repeat the same stocks relentlessly, but without the repetition, it just doesn’t get through. And these have been winners. Why Intel? Why Meta? They fit the moment, that’s why. First, their products are in such high demand, one new, one old, that there are no concerns about demand destruction, which is usually the end result when higher interest rates clash with higher prices. Second, they’re each in a new product cycle…
There are only three major CPU companies: Intel, AMD, and Arm Holdings. This market is so big that it can use them all. Plus, Intel has a new foundry coming online with great specs, albeit not as great as Taiwan Semi. Intel CEO Lip-Bu Tan has turned his company from a has-been into a force to be reckoned with. Of course, Lisa Su’s AMD has left them in the dust… But Lip-Bu can see in the dust. And unlike his still-dreaming predecessor, Pat Gelsinger, he has a grip on what can be done, and more important, what can’t.
Earlier this month, Reuters reported that Intel may be scaling back its Ohio memory chip factory, perhaps sharing it with SK hynix, a Korean giant, to staunch the bleeding. He’s a disciplined investor, comes from his time as a disciplined venture capitalist. I have total faith that his plan to return Intel to greatness will succeed. However, I acknowledge that balance sheet was wrecked by Gelsinger, and the current turnaround’s only possible thanks to the resurgence of CPU demand. Intel stock dropped seven points today, something we are used to seeing after parabolic moves. It could end up being another good chance to get in.
We also recently discussed a hidden catalyst for Intel in our article “Is Now the Time to Bet on Intel’s (INTC) Server CPU Comeback and AI Ambitions?“
Leadership Restructuring And Foundry Expansion
Intel Corporation showed powerful operational execution during the second quarter, delivering total revenue of $16.1 billion, which represents a 25% increase compared to the same period in the prior year. Intel said the results exceeded its financial guidance, with non-GAAP diluted earnings per share of $0.42 and a non-GAAP gross margin of 41.8%. Operating cash flow for the period hit a strong $7 billion, showing healthy base liquidity as the firm navigates its strategic pivot. The company operates within a specialized central processing unit market alongside Advanced Micro Devices and Arm Holdings, capturing essential compute volume across global data centers and personal computing devices.
Under fresh executive direction led by CEO Lip-Bu Tan, management has adopted a more disciplined approach to capital allocation. Reuters reported that Intel and SK hynix were in exploratory talks over potentially leasing part of Intel’s Ohio facility or forming a joint venture, although no final agreement had been reached. Moreover, the development of advanced internal foundry capabilities provides a domestic manufacturing alternative for enterprise clients seeking supply chain resilience, allowing Intel to capitalize on structural demand without overextending its financial resources.
Balance Sheet Damage And Execution Risks
Despite encouraging turnaround efforts and top-line expansion, Intel Corporation carries legacy challenges stemming from previous capital expenditure missteps and a severely strained balance sheet. Intel reported an $11 billion GAAP net loss during the second quarter, but the figure was driven largely by a $12.5 billion noncash mark-to-market loss tied to shares held in escrow under its U.S. government agreement. Restoring fiscal health requires intense cost discipline, aggressive asset rationalization, and careful management of capital intensity across greenfield projects.
Additionally, competing against established rivals in advanced semiconductor fabrication remains exceptionally difficult, especially as competing foundries maintain technological leads in nanometer node scaling. Recent market sessions also highlighted heightened stock volatility, where rapid price appreciation was followed by sharp pullbacks as investors digested the ongoing operational risks associated with the corporate restructuring process.
However, we mentioned Cramer’s previous comments as he discussed one of the reasons for the stock’s pullback as he weighed in on Intel (INTC) Corporation, Earnings Performance, and Government Stake.
Hedge Fund Positioning And Moderate Short Interest
Hedge funds tracked by Insider Monkey display growing engagement with Intel Corporation as the turnaround narrative gains traction. According to Insider Monkey’s database of over 1000 hedge funds, 138 hedge funds held positions in the company at the close of the second quarter, marking an increase from 112 hedge fund holders in the prior period. As of mid-September 2026, short interest stands at 3.1% of the float, showing modest bearish hedging rather than overwhelming negative conviction.
However, the rising institutional interest contrasts sharply with a demanding valuation profile. Intel Corporation currently trades at a forward earnings multiple of 63.3, far outpacing the broader sector median of 23.2 as markets price in an aggressive multi-year turnaround. Even so, as the chipmaker navigates its operational recovery under disciplined executive oversight, the combination of strong computing demand and expanding institutional sponsorship provides a solid foundation for patient stockholders looking past legacy balance sheet hurdles.
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