Shortly after the opening bell, we will be initiating a position in Intel , buying 400 shares at roughly $114. Following the trade, Jim Cramer's Charitable Trust will own 400 shares of INTC with a weighting of about 1.10%. We're jumping on the recent pullback in Intel to initiate a new position in this chipmaker. Shares are looking higher in premarket trading after a five-session slide that saw the stock fall from $123.52 to $107.93 through Tuesday, a decline of roughly 12%. The pullback coincided with Nvidia's Computex conference, where fellow Club name Nvidia unveiled a new PC processor designed for artificial intelligence agents. We think the Intel pullback is one worth buying, given our focus is more on the central processing unit (CPU) renaissance inside the data center, as well as its growing foundry business. We're funding this trade with cash raised from Tuesday's sales of Broadcom , Corning and Wells Fargo . As we've explained with our position in Arm Holdings , data center CPUs are soaring in demand because they are better equipped at handling AI agent-drive tasks. Graphics processing units (GPU) from Nvidia are still key for training. However, Intel CEO Lip-Bu Tan has explained multiple times, including on " Mad Money " a few weeks ago, that the ratio of CPUs to GPUs in AI server racks has rapidly evolved as AI moved from training to inference to agentic systems. In the beginning stages of the AI revolution, the ratio used to be one CPU for every eights GPUs. However, the rise of agentic AI has pushed the ratio closer to one CPU for every four GPUs. Tan believes the ratio could eventually reach parity, meaning one CPU for every GPU, and a growing number of industry observers believe it could shift even further in favor of CPUs as agentic workloads expand to multi-agent. While our thesis in Arm is about them growing market share in the data center market, demand is so strong that many will continue to win. Another key part of the Intel story is its chip manufacturing business, similar to what Taiwan Semiconductor Manufacturing Co. does today. With TSMC operating near full capacity as hundreds of billions — and potentially trillions — of dollars flow into AI infrastructure, customers increasingly need alternative sources of advanced chip manufacturing and packaging. That's where Intel stands to benefit. In Jim's interview with Tan, he highlighted the improvements made in its 18A manufacturing process under his guidance. Before Tan took over as CEO in March 2025 , the foundry business was floundering, trying to do many things at once. At a Bank of America conference Tuesday, Intel CFO David Zinsner put it this way: "It was like trying to fly the plane and fix the wing at the same time." Customers were scared off by the numerous delays and low manufacturing yields. But as Intel demonstrated enhancements to its technology, customer interest increased, including from Apple . On May 8, the Wall Street Journal reported that the two companies reached a preliminary deal to produce some Apple chips. Intel's foundry also has another big customer in Elon Musk's $119 billion Terafab project in Austin, Texas. Musk said this project, which will make chips for Tesla, SpaceX, and SpaceXAI, will rely on Intel's future 14A chip node process. Tan previously said he expects 14A will be in volume production in 2029. We are initiating the Intel position with a price target of $140. (Jim Cramer's Charitable Trust is long INTC, ARM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
