The “Lowly Worm” Turning Heads in Semiconductor Gains

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The “Lowly Worm” Turning Heads in Semiconductor Gains

We recently published a list of

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. In this article, we are going to take a look at where Intel Corporation (NASDAQ:INTC) stands against other stocks on Jim Cramer’s radar.

Jim Cramer, the host of Mad Money, recently broke down the market’s performance on Tuesday, discussing how President Donald Trump’s early days in office might be influencing investor sentiment. He speculated that the stock rally could be tied to a belief among investors that Trump’s promises on tariffs may be harsher than his actual actions, leading to optimism.

Cramer pointed out that during Trump’s first presidency, investors learned to buy stocks during moments of market volatility caused by his aggressive rhetoric. He noted that Trump’s frequent saber-rattling would often prompt sell-offs, but those moments, when stocks of companies he criticized dropped, turned out to be prime opportunities to invest.

Cramer explained that this pattern of buying the dips was exactly what played out on Tuesday. After months of discussing high tariffs, Trump’s inaugural speech struck a more tempered tone, and he avoided threatening severe trade barriers. According to Cramer, this shift in rhetoric surprised many, especially given how aggressive his stance had been in the past.

“Maybe four years is a long time ago, but people seem to forget the Trump drill. The president loves the stock market. He always loves to send signals that all hell is going to break loose and when it doesn’t, well guess what? The market flies.”

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Cramer also suggested that this latest market rally is driven by the prospect of tariffs, especially on tariffs that are smaller than initially forecasted. He mentioned that these could increase if foreign countries don’t comply with U.S. demands. Furthermore, Cramer highlighted the role of new projects such as Stargate, an AI infrastructure initiative backed by OpenAI, Oracle, and SoftBank. He noted that this project, which will involve new data centers likely outfitted with Nvidia technology, was another contributing factor to the market’s upbeat performance. Cramer noted that the presence of major tech leaders at the inauguration further reinforced optimism.

“Will it stay this way? What did we learn about Trump the first time around? You could never be sure. The difference on day one? He knows business people, Silicon Valley. He knows how things work. You may like him. You may hate him. But the bottom line? If you’re a tech titan, Trump will take your call. In fact, he’ll call you. Biden, I don’t know if he knew who they even were and he certainly didn’t bother to call them. In the end, I think he preferred to sue them. If you own stocks, which is why you watch me, Trump’s method is a heck of a lot better for your portfolio.”

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Our Methodology

For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 21. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (

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Number of Hedge Fund Holders: 68

Discussing Intel Corporation (NASDAQ:INTC) during the episode, Cramer said:

“Couple of semiconductor names like Applied Materials, which make semiconductor capital equipment, and even the lowly Intel both also roughly 12% higher thanks to the amazing quarter (of Taiwan Semiconductor)… Even lowly worm Intel managed to become one of the five best-performing stocks… up more than 12% and many other chip plays had huge gains, especially the semiconductor capital equipment names.”

Intel (NASDAQ:INTC) develops and produces computing products such as processors, memory, and AI solutions. Since TSMC released its earnings results on January 16, Intel’s stock is up over 7%. Explaining why Intel and other stocks in the group experienced gains because of TSMC, Cramer said:

“Now, like I said earlier, the pin action from this Taiwan Semi quarter was extensive, but some of the biggest beneficiaries were the semiconductor capital equipment companies that, well, these are huge, huge makers of equipment that Taiwan Semi buys… So why did Taiwan Semi quarter spark such a big rally for the semi capital equipment sector? Simple: In addition to all of its bullish revenue and margin guidance for the first quarter of 2025 and the positive commentary about its long-term revenue growth potential, Taiwan Semi also disclosed its capital equipment budget for full year 2025. It was enormous.

Cramer highlighted that TSMC plans to invest between $38 billion and $42 billion in capital expenditures this year, marking an increase of 28% to 41% from the previous year. This spending forecast surpassed Wall Street’s expectation of $36.4 billion. Cramer pointed out that TSMC’s management emphasized that higher capital spending often signals greater growth potential in the years to come, a statement that Cramer believes shows the company’s strategic foresight. He also noted that this strong

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for capital equipment investment is one of the reasons why semiconductor capital equipment stocks have been gaining momentum recently.

Overall, INTC ranks 4th on our list of stocks on Jim Cramer’s radar. While we acknowledge the potential of INTC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INTC but that trades at less than 5 times its earnings, check out our report about the

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