Jim Cramer names Intel his #1 pick despite 228% YTD rally; cites AI CPU demand and foundry upside
On June 17, CNBC's Jim Cramer named Intel his top stock pick after its remarkable turnaround, declaring it his #1 name—ahead of NVIDIA—despite the stock being up 228% year-to-date. He added to his Cramer's Charitable Trust position twice in June (initiated June 3), emphasizing that investors should focus on where the stock is headed, not where it's been. Intel shares now trade around $121, up from the low $20s in August 2025 when the U.S. government announced a 10% stake, followed by NVIDIA's $5 billion investment.
Cramer's thesis centers on CPU demand driven by the shift to inference and agentic AI. As agentic systems execute inference workloads at scale—responding to queries, managing workflows with minimal human intervention—they require massive CPU capacity alongside GPUs. Cramer argues CPUs may face a 'severe shortage,' granting chipmakers pricing power and profit upside. He also highlights Intel's nascent foundry business: with TSMC operating near capacity and AI spending accelerating, chip designers increasingly seek alternative suppliers, particularly those offering U.S.-based manufacturing.
Intel's Q1 2026 results confirm the inflection: revenue grew 7% YoY to $13.6 billion (beating Wall Street consensus of $12.3 billion), Data Center and AI revenue jumped 22% to $5.1 billion, and Foundry Services grew 16% to $5.4 billion. Non-GAAP EPS landed at $0.29 versus consensus of $0.01. CEO Lip-Bu Tan reported 18A yields now 'running ahead of internal projections'—a reversal from January's 'below expectations' commentary.
For architects evaluating CPU capacity in agentic deployments, Intel's return has material implications. Fab 52 in Arizona is ramping 18A at over 10,000 wafer starts per week; risk production 14A is targeted for 2028 in Oregon, with high-volume manufacturing in 2029. Supply constraints and foundry shortages (TSMC at-capacity; geopolitical risk in Taiwan) make domestic CPU and fab capacity increasingly valuable. Analyst upgrades are cascading—BofA double-upgrade; KeyBanc set $110 PT—signaling that repricing of consensus on Intel's AI-era positioning is underway.