AMD shares surged Monday after the announcement that the two companies will produce a laptop-computer chip that combines an Intel processor and an AMD graphics unit for complex video gaming.
The Wall Street Journal first reported the deal Monday morning.
"Intel and AMD have hated each other since their formation," Cramer said on "Squawk on the Street." "So, this is amazing."
The proposed deal would compete with Nvidia in the laptop chip market. Nvidia's stock fell on the news. Cramer said Intel's CEO, Brian Krzanich, is "determined to take them on."
"This is incredible. Incredible," Cramer added. "And right before Nvidia reports this week. Gutsy."
Cramer said he believes the deal does not represent an actual threat to Nvidia because the company is "much better."
"I do think that AMD is not as good at gaming chips as Nvidia," the host of CNBC's "Mad Money" said. "But Intel has a lot to gain. Intel should have been in gaming chips for years."
AMD and Intel did not immediately respond to requests for comment.
— CNBC's Tae Kim contributed to this report.