Intel shakeup creates buying opportunities in AMD, says Jim Cramer

CNBC’s Jim Cramer hit the table on one of his favorite semiconductor companies after the stock plunged into the news of a leadership change at one of its biggest rivals, Intel.

Shares of Advanced Micro Devices fell nearly 4% after Intel announced it will replace its CEO in a month. Intel stock rose 7% as investors welcomed the news that current CEO Bob Swan would step down to make way for Pat Gelsinger, an Intel alum who leads VMware, to take over the role in February.

“As much as Intel needs a change, the point here is that you now get the chance to buy Intel’s more nimble rival, AMD, with over three dollars for something that might not even happen: a spin on Intel within the next three years, “said the host of ‘Mad Money.'” Gelsinger has done a good job at VMware, but Intel doesn’t really need an old Intel hand. It needs someone new, young and hungry, who can shake up, if not blow up, the culture. ”

In AMD, buyers would get a share of a $ 110.4 billion company whose shares nearly doubled last year. Shares of Intel, a larger player with a market cap of $ 233.4 billion, fell more than 16% in 2020 as the company reported a slowdown in new chips in development and lost a significant partnership with Apple.

Prior to that woes, companies like AMD and Samsung began to take market share from Intel.

Cramer, who has praised Lisa Su, CEO of AMD, for her stewardship of the graphics chip maker, also reiterated his love for Nvidia, a $ 335 billion semiconductor player.

“I’d rather buy stock in a company that beats Intel to a pulp, AMD,” Cramer said. “Under Lisa Su’s incredible leadership, they’ve gone from a similarly run semiconductor – always second fiddle to Intel – to the one that makes better chips.”

The comments came after a mixed day of stock trading on Wall Street. The Dow Jones Industrial Average ended the session with 8 points, or about 0.03%, at 31,060.47. The S&P 500 and Nasdaq Composite both increased their gains as of Tuesday, up 0.23% to 3,809.84 and 0.43% to 13,128.95 respectively.

The three averages remain in the red week so far.

Disclosure: Cramer’s charity owns shares of Advanced Micro Devices and Nvidia.

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