Intel Shakeup creates a buying opportunity in AMD, says Jim Cramer

CNBC’s Jim Cramer hit the table at one of his favorite semiconductor companies after shares plunged over news of a leadership change at one of its leading rivals, Intel.

Shares in advanced micro-devices fell by almost 4% after Intel announced it would replace its CEO in a month. Intel’s share rose 7% as investors welcomed the news that current CEO Bob Swan will step down to make way for Pat Gelsinger, an Intel alumnus who heads VMware, to to take over the role in February.

“Just as much as Intel needs a change, what’s important here is that you now have the chance to buy Intel’s more agile competitor, AMD, for more than three dollars, for something that might not even happen. : a turnaround at Intel within the next three years, the “Mad Money” host said. “Gelsinger did a good job at VMware, but Intel does not really need an old Intel hand. He needs someone new, young, hungry who can shake up the culture if it doesn’t blow up completely. “

In AMD, buyers would get a piece of a $ 110.4 billion company whose share nearly doubled last year. The stake in Intel, a major player with a market capitalization of $ 233.4 billion, fell by more than 16% in 2020 as the company reported a delay in new chips being developed and a significant partnership with Apple lost.

Before this misery, companies like AMD and Samsung started to pick up the market share of Intel.

Cramer, who praised AMD CEO Lisa Su for her graphics chipmaker’s stewardship, also reiterated his love for Nvidia, a $ 335 billion semiconductor player.

“I’d rather buy the shares of a company that beats Intel, AMD,” Cramer said. “Under the incredible leadership of Lisa Su, they have moved from a semiconductor that has always led Intel to the one that makes better chips.”

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

The three averages so far remain in the red week.

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

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