Cramer Calls Intel His Top Pick as Tan Reshapes the Chipmaker

Jim Cramer has named plenty of favorite stocks over the years. His latest pick was trading in the low $20s less than a year ago.

On June 30, the "Mad Money" host told viewers that Intel is now his top pick in the market. He credited CEO Lip-Bu Tan with pulling off one of the sharpest turnarounds in the semiconductor sector, pointing to a restructuring that has cut costs and refocused the chipmaker on its core foundry and data center businesses.

Cramer said the market has not priced in the speed of Intel's operational shift. The stock has more than doubled from its 2024 lows near $19, still trading at roughly 22 times forward earnings – a discount to peers like NVIDIA and AMD. Tan, who took the helm in March, has slashed non-core R&D, exited the smartphone modem business, and pushed Intel's 18A manufacturing process toward a 2026 production target.

The endorsement came on a day when Intel shares closed at $42.17, up 2.3%. Volume was about 40% above the 30-day average, suggesting institutional attention.

What makes the call distinct from Cramer's past picks is the timing. Intel faces a series of concrete catalysts: a potential CHIPS Act disbursement in the third quarter, a foundry customer announcement expected before year-end, and the 18A process tape-out. That tape-out could determine whether Intel regains a lead over TSMC on advanced nodes.

Not everyone is sold. Analysts remain split; of the 36 covering Intel, 12 rate it a buy and 14 a hold, with a median price target around $48. The bear case centers on execution risk – 18A still has to deliver on power and yield, and foundry revenue remains negligible against TSMC's scale.

Cramer framed the risk as worth taking. "This is not the Intel of five years ago," he said. "Tan is building something the market is going to have to respect."

Intel's Alpha Score stands at 46/100, a Mixed reading that reflects improvement in momentum but persistent balance sheet leverage. The company carries about $48 billion in long-term debt, partly from its foundry buildout.

The next real test comes in late July, when Intel reports second-quarter earnings. Tan has not issued formal guidance for 2025, the restructuring is expected to shrink the quarterly operating loss in Intel Foundry from roughly $2.8 billion to around $2 billion. That narrowing, if it materializes, would give Cramer's call its first hard evidence.

Meanwhile, the broader stock market backdrop matters. Tech valuations have compressed since mid-June on rate expectations. Intel's lower multiple insulates it from some of that pain, a hawkish Fed could still weigh on the whole sector.

Cramer's public vote of confidence puts Intel in a spotlight it has not occupied in years. Whether that spotlight helps or hurts depends entirely on execution over the next two quarters.