Morningstar strategist Tom Lauricella warned on the firm's Investing Insights podcast that emerging markets funds and value ETFs have quietly become AI bets, with semiconductors now about 16% of the U.S. stock market and roughly 22% of major emerging market indexes concentrated in just three or four companies anchored by Taiwan Semiconductor Manufacturing. That EM weighting has doubled in about 18 months, from roughly half that level, and about a quarter of an EM portfolio now rides the same AI capex cycle that drives Nvidia. In value indexes, technology exposure has climbed from about 11% at the end of 2024 to roughly 20% now, and including tech-adjacent names more than a quarter of many value ETF portfolios sits in tech and tech-adjacent stocks, with Amazon now the largest holding in the Russell Large value index at 6%, alongside Oracle and Cisco Systems. Lauricella said active managers face a benchmark trap, citing one T. Rowe Price emerging markets fund with some 33% in those three names, two Fidelity EM funds on opposite sides of the same bet, and a Dodge & Cox fund holding just single digits in those companies. He urged investors to check the actual percentages in their emerging market funds and value ETFs, noting semiconductors are historically very cyclical, more volatile than general tech stocks, and several leaders carry very high valuations.
Tigress Financial Raises Intel Price Target to $145 on Terafab Partnership
Tigress Financial reiterated its Buy rating on Intel and raised its price target to $145 from $118 on September 15, citing the company's Terafab partnership with companies associated with Elon Musk, including SpaceX, Tesla, and xAI, as a strategic boost to its AI foundry ambitions. The initiative is part of an ambitious semiconductor manufacturing project focused on producing advanced chips for artificial intelligence, robotics, autonomous vehicles, and other compute-intensive applications. Intel said in its second-quarter earnings report that it remains well positioned to pursue sustainable growth through advanced packaging and its wafer foundry network, pointing to momentum in Physical AI and robotics with more than 130 customers testing its Core Ultra Series 3 and Core Series 3 processors for edge AI and robotics applications. The partnership's commercial terms, production volumes, and potential revenue contribution have not been fully disclosed, and the principal risk is that it could strengthen Intel's strategic position in foundry manufacturing without generating meaningful financial returns for several years. According to the Insider Monkey database, 138 hedge funds held stakes in Intel at the end of the second quarter, up from 112 funds in the first quarter, with SoftBank Group Corp. and Coatue Management among the notable institutional holders at approximately $12.14 billion and $1.68 billion, respectively, while roughly 152.25 million Intel shares were sold short as of August 31, representing about 3.02% of the public float.
Cramer Says Broadcom Has More Orders Than Almost Anyone But NVIDIA
Jim Cramer said Broadcom CEO Hock Tan told him demand for AI compute infrastructure remains extremely strong and durable, with the custom chip designer holding more orders than almost anybody other than Jensen Huang. Cramer's remarks on CNBC center on whether Broadcom can keep capturing custom AI chip orders, and the third quarter earnings released on September 2nd support the growth narrative, with revenue up 86%, AI semiconductor revenue up 221%, and fiscal year 2026 guidance implying 186% annual AI revenue growth. Tan reaffirmed that Broadcom could pull in $115 billion in annual AI chip sales in 2027 and $230 billion in 2028. Still, the fiscal fourth quarter guide left investors wanting more, with $34.8 billion in revenue missing analyst estimates of $35.03 billion and gross margin guided at 73%, a five point annual drop due to a higher mix of XPU sales. Estimates suggest 71% of Broadcom's fiscal 2027 and 2028 XPU deployment could rely on OpenAI and Anthropic, meaning a huge portion of orders might come from firms now calling for a slowdown in AI development. In Q2, 170 out of the 1,006 funds tracked by Insider Monkey held a stake in Broadcom, a slight drop from 163 out of 1,022 funds in Q1, with notable exits including Third Point and Two Sigma Advisors, and the stock trades at a forward P/E ratio of 18 versus NVIDIA's 23.42.
Intel and SK Hynix Explore US Memory Chip Partnership as Shares Surge
Intel and SK Hynix are exploring partnership opportunities to manufacture memory chips in the United States, reportedly centered on Intel's long-delayed Ohio manufacturing complex, with possibilities ranging from SK Hynix leasing capacity to a broader joint venture involving cloud companies. No formal partnership has been announced, and SK Hynix stressed that no specific plans or arrangements have been finalized. Since reports of the potential partnership surfaced Wednesday, Intel shares have surged roughly 10%, while SK Hynix has climbed about 5%; SK Hynix stock has risen 20% since its U.S. Nasdaq debut in July, while Intel is up about 4% over the same period. Intel's turnaround is gaining traction independently, with Q2 revenue jumping 25% year over year to $16.1 billion, Data Center and AI revenue surging 59% to $6.3 billion, Intel Foundry revenue up 31%, and management guiding Q3 sales to $15.8-$16.8 billion, while the Zacks Consensus calls for fiscal 2026 revenue to rise nearly 18% and FY26 EPS to soar to $1.50 from $0.42 per share last year. SK Hynix reported record Q2 performance amid robust AI demand, began mass shipments of HBM4 with production expected to ramp through the second half of the year, and shipped samples of HBM4E, while the Zacks Consensus Estimate calls for FY26 revenue to soar over 250% to $240.09 billion and EPS to jump more than 500% to $25.69. Despite its AI-memory leadership, SK Hynix trades at a forward P/E multiple of 7X, while Intel trades at more than 100X forward earnings; SK Hynix carries a Zacks Rank #2 (Buy), while Intel holds a Zacks Rank #3 (Hold).
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