We’re starting a position in a chipmaker that is benefiting from the AI boom in multiple ways
Jim Cramer’s Charitable Trust has initiated a new position in Intel, purchasing 400 shares at approximately $114 per share. This move follows a five-session decline in Intel’s stock, which saw shares fall from $123.52 to $107.93—a drop of roughly 12%—prior to the trade. The trust now holds 400 shares of the chipmaker, representing a portfolio weighting of about 1.10%.
The decision to enter the position is driven by a focus on the central processing unit (CPU) renaissance within data centers and the growth of Intel’s foundry business. The capital for this investment was raised through the sale of holdings in Broadcom, Corning, and Wells Fargo.
Did You Know? Before Lip-Bu Tan took over as CEO in March 2025, Intel’s foundry business was described by CFO David Zinsner as being in a state where it was “like trying to fly the plane and fix the wing at the same time.”
Market Shifts in AI Infrastructure
The demand for data centre CPUs is increasing as these components prove effective at handling tasks driven by artificial intelligence agents. While graphics processing units (GPUs) remain essential for training AI, the rise of agentic systems has altered the required ratio of CPUs to GPUs in server racks. Initially, the industry utilized one CPU for every eight GPUs; however, this has shifted toward one CPU for every four GPUs. There is speculation among industry observers that this ratio could eventually reach parity or shift even further toward CPUs as multi-agent workloads expand.
Expert Insight: The strategic pivot toward Intel reflects a broader bet on the diversification of AI hardware. As the industry moves beyond the initial training phase of AI, the infrastructure requirements are evolving. Intel’s ability to capture this shift depends heavily on its 18A manufacturing process and its capacity to serve as a reliable alternative to other major foundries, particularly as global demand for advanced chip packaging continues to surge.
Foundry Growth and Future Projections
Intel is positioning its foundry business to compete in a market where customers seek alternatives to current industry leaders. The company has secured significant interest, including a preliminary deal reported on May 8 to produce certain chips for Apple. The company is involved in Elon Musk’s $119 billion Terafab project in Austin, Texas. This project is expected to utilize Intel’s 14A chip node process, which is projected to be in volume production by 2029.
Looking ahead, the performance of these manufacturing processes may dictate Intel’s success in the foundry space. If Intel successfully scales its 18A and 14A processes, it could potentially gain a larger share of the manufacturing demand currently flowing into AI infrastructure. The trust has set a price target of $140 for the stock.
Frequently Asked Questions
Why is the trust buying Intel despite recent market volatility?
The trust is targeting a “pullback” in the stock price, viewing the recent 12% decline as an opportunity to enter a position based on the long-term potential of data centre CPUs and the company’s foundry business.
What role does Intel play in the evolving AI landscape?
Intel is being utilized as a supplier for the growing demand for CPUs needed to manage AI agent-driven tasks, while its foundry division aims to provide advanced chip manufacturing capacity for major clients like Apple and projects like Terafab.
What are the risks associated with Intel’s foundry business?
Historically, the business faced challenges with low manufacturing yields and delays. However, recent technological enhancements have been implemented to improve performance and attract new customers.
How do you view the evolving balance between CPU and GPU requirements in the current AI development cycle?