Cramer’s trust adds to Intel as AI chip demand signs build

CNBC’s Investing Club said Monday that Jim Cramer’s Charitable Trust planned to buy 100 additional shares of Intel at about $106 apiece. For everyday investors watching the chip trade, the move puts fresh attention on Intel as the market weighs a recent pullback against continued signs of tight supply in artificial intelligence hardware.

According to the Investing Club, the purchase would bring the trust’s Intel position to 1,000 shares. Intel’s weight in the portfolio would rise to about 2.75% from roughly 2.5%, meaning a slightly larger share of the trust’s assets would be tied to Intel’s stock performance.

The club said the planned buy followed a strategy discussed in its Friday Morning Meeting. Intel shares were indicated a few dollars lower before the market opened Monday, CNBC said, adding to a recent decline.

AI demand remains the core signal

The club pointed to fresh data from Taiwan Semiconductor Manufacturing Company as one reason the broader chip setup still looks supply-constrained. TSMC reported Monday that June sales rose about 68% from a year earlier, according to CNBC.

TSMC, one of the world’s most important contract chipmakers, is scheduled to report full second-quarter results later this week. CNBC said the June sales figure suggests demand for AI chips continues to run ahead of available supply.

That matters for chip stocks because AI systems need large numbers of specialized processors, memory and networking components. When demand is higher than supply, chipmakers and their suppliers can see stronger order books, though stock prices can still fall if investors worry about valuation, competition or future growth rates.

Intel expands in Ireland

CNBC also cited Intel’s Monday announcement that it will invest about $5.7 billion in its Ireland facility. The company said the spending is aimed at expanding production of Xeon server processors and other products.

Xeon chips are Intel processors used in servers, the computers that power cloud services, corporate data centers and AI-related workloads. Server processors are different from consumer PC chips because they are built to handle many users and heavy computing tasks at the same time.

CNBC identified Alphabet as one of the major customers for Intel’s Xeon processors. In April, Intel and Alphabet announced a multiyear collaboration that includes using Intel Xeon processors across Google Cloud, CNBC said.

The same collaboration also includes work on custom ASIC-based infrastructure processing units, according to CNBC. An ASIC, short for application-specific integrated circuit, is a chip designed for a specific task rather than general-purpose computing. Infrastructure processing units, or IPUs, help manage data-center workloads, including systems that support AI.

CNBC said Jim Cramer’s Charitable Trust holds positions in both Intel and Alphabet. The Investing Club also noted that subscribers receive trade alerts before trades are made in the trust, and that Cramer waits before executing trades after alerts or after discussing a stock on CNBC television.

This story draws on original reporting from CNBC.