Intel turmoil creates buying opportunity at AMD, says Jim Cramer

CNBC’s Jim Cramer hit the table at one of his favorite semiconductor companies after the stock plummeted with news of a change in leadership at one of its main rivals, Intel.

Advanced Micro Devices’ shares fell nearly 4% after Intel announced it would replace its chief executive in a month. Intel shares rose 7%, with investors welcoming news that current CEO Bob Swan would step down to pave the way for Pat Gelsinger, a former Intel student who runs VMware, to take over in February.

“As much as Intel needs a change, what matters here is that now you are getting the chance to buy Intel’s more agile rival, AMD, for more than three dollars, for something that may not even happen: a turnaround at Intel within the next three years, “said the host of” Mad Money “. “Gelsinger did a good job at VMware, but Intel doesn’t really need an old hand from Intel. It needs someone new, young and hungry who can shake up the culture if it doesn’t blow it up entirely.”

At AMD, buyers would receive a piece of a $ 110.4 billion company, whose shares nearly doubled last year. Shares of Intel, a major player with a market value of $ 233.4 billion, fell more than 16% in 2020, when the company reported a delay in new chips in development and lost a major partnership with Apple.

Before these problems, companies like AMD and Samsung started to gain market share from Intel.

Cramer, who applauded AMD CEO Lisa Su for his management of the graphics chip maker, also reiterated his love for Nvidia, a $ 335 billion semiconductor company.

“I prefer to buy the shares of a company that is reducing Intel to a pulp, AMD,” said Cramer. “Under the incredible leadership of Lisa Su, they went from being a semiconductor that also worked – always behind Intel – to being 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 down 8 points, or about 0.03%, at 31,060.47. The S&P 500 and Nasdaq Composite expanded their gains on Tuesday, rising 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 fund has shares in Advanced Micro Devices and Nvidia.

Legal notice