Jim Cramer picks Intel as top stock, citing 236% rally and AI CPU demand

Jim Cramer named Intel Corp. his top stock pick Wednesday, saying the chipmaker's 236% rally this year still leaves room for AI-driven gains.

"You can't afford to care about where these stocks have been. You should only care about where they're going," Cramer, host of CNBC's "Mad Money," said during the Investing Club's June Monthly Meeting. "When it comes to Intel, I think the answer is up."

Intel shares traded around $123 after surging from below $20 in August 2025, when the U.S. government took a 10% stake in the company. Nvidia Corp. invested $5 billion the following month. The stock has gained about 236% year-to-date, one of the few major equities to largely evade the early June selloff. President Donald Trump's remarks about a potential Intel-Apple partnership pushed shares up 8.96% in pre-market trading Thursday.

Cramer argued that rising demand for central processing units — Intel's core product — could create a severe shortage as agentic AI proliferates, giving chipmakers significant pricing power. He also pointed to Intel's emerging foundry business as a long-term growth driver as customers seek alternatives to Taiwan Semiconductor Manufacturing Co.

"There's a revolution going on and this revolution requires as many CPUs as possible," Cramer said, contending that CPUs may experience a shortage that boosts profits across the sector.

Under Chief Executive Officer Lip-Bu Tan, Intel has staged a remarkable turnaround from its mid-2025 lows. The company's CPU-to-GPU ratio inside data centers is trending toward parity, according to Tan, a shift that could boost demand for Intel's processors as AI infrastructure buildout accelerates.

Cramer acknowledged that his pick breaks his usual discipline of avoiding stocks after massive rallies. But he argued that data center-linked hardware names require a different framework. "I don't want to throw away the discipline of not touching a stock that's rallied like crazy, but when it comes to tech hardware that's connected to the data center, I think you may not have a choice," he said.

The CNBC host also named Arm Holdings as his second-favorite pick, noting the company's intellectual property for power-efficient semiconductors and its push into first-party data center CPUs. The Investing Club has adopted a strategy of trimming Arm down to a 1% weighting as the stock has surged since its April initiation.

The endorsement signals confidence in Intel's turnaround narrative under Tan. Investors will watch for the company's next earnings report for updates on foundry customer wins and data center revenue trends.

This article is for informational purposes only and does not constitute investment advice.