Jim Cramer Calls Intel (INTC) the Best Stock in Show and Micron (MU) No. 2

Jim Cramer touted Intel Corporation (INTC) and Micron Technology (MU) as the top two stocks in the technology sector on the September 17 episode of Mad Money. Intel reported a 25% year-over-year increase in revenue to $16.1 billion for the second quarter, with data center and AI revenue up 59% to $6.3 billion. Operating income for Intel reached $4.8 billion, a significant jump from $2.7 billion the previous year.

The company also saw a rise in its client supply constraints easing in the second half of 2026, while data center and AI product constraints are expected to persist into 2027.

Micron Technology, on the other hand, posted an impressive 80.4% GAAP operating margin in its fiscal third quarter, up from 67.6% in the previous quarter and 23.3% a year earlier. The company's non-GAAP operating margin was even higher at 81.2%, with operating cash flow reaching $25.4 billion. Micron noted that DRAM inventories were very tight, staying below 120 days.

Intel CEO Lip-Bu Tan expressed his concerns over the memory shortage, stating that capacity was very limited and projects were being delayed due to insufficient memory supply. The prices had even increased by five to seven times, and he projected that the situation would get worse.

Intel's financial risk lies in the gap between improving product economics and the cost of its manufacturing strategy. The company's foundry segment generated $5.8 billion in revenue in Q2, with $5.5 billion coming from intersegment transactions and just $293 million from external revenue. However, the segment reported a $2.1 billion operating loss, compared to a $3.2 billion loss a year earlier.

Micron Technology, on the other hand, is facing the opposite side of the memory cycle, with an 80.4% GAAP operating margin that is more than three times the year-earlier level. Despite this, the company spent $7.1 billion on net capital expenditures in the fiscal third quarter, adding capacity while the market remains tight.

Hedge funds have shown greater interest in Intel, holding 138 shares in Q2, up from 112 in Q1. Micron Technology, Inc. was held by 184 hedge funds, compared to 154 in the first quarter. Intel's short interest is roughly 3.0% to 3.3% of float, while Micron's is approximately 2.6% of float.