Jim Cramer recently put Intel (INTC) at the top of his list, calling it his "favorite stock" on CNBC's "Mad Money." After staying on the sidelines for years during the AI boom, Intel has finally started to catch up with its peers. Amid the excitement of its most ambitious transformations, INTC stock has surged 165% year-to-date (YTD), surpassing the market's 8.7% gain. However, Cramer's optimism for Intel isn't just based on its quarterly performance or its turnaround story. It is actually based on where the semiconductor industry is investing billions of dollars over the next several years and how Intel fits into it. Let's dig into this deeper.
Cramer is tying Intel's future directly to one of the most important companies in the semiconductor supply chain: ASML Holdings (ASML). Both companies sit at the very opposite end of the semiconductor chain but are closely linked. Specifically, ASML builds the lithography machines that semiconductor manufacturers use to print microscopic circuit patterns onto silicon wafers. Intel, as a chip designer and manufacturer, then installs them in its fabs to manufacture chips. Unlike companies such as Nvidia (NVDA) or AMD (AMD), which largely outsource chip manufacturing to Taiwan Semiconductor Manufacturing (TSM), Intel designs its processors and also manufactures many of its own chips in its fabrication plants. Over the past few years, Intel has been aggressively trying to regain leadership in semiconductor manufacturing after falling behind rivals like AMD, TSMC, and Nvidia.
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In ASML's second quarter, the company indicated that demand for advanced chipmaking is accelerating. According to the management, AI demand is pushing customers to invest in 3nm production for current AI accelerators, 5nm and 4nm chips supporting AI ecosystems, rapid ramp of 2nm technology, and early investments toward future 1.4nm nodes. This is resulting in increasing demand for advanced lithography systems more than expected. That's the reason ASML increased its full-year 2026 guidance to between 43 billion euros and 45 billion euros. Intel, as one of ASML's earliest and third-largest clients, is well-positioned to benefit from this. These machines are expected to play a major role in future manufacturing technologies such as Intel's next-generation process nodes. According to ASML's management, Intel Foundry uses ASML's High-NA EUV technology on the Intel 18A process node to build a fraction of Intel Core Ultra Series 3 processors.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
