Nvidia's (NVDA) investment prospects still shine brighter than Intel's (INTC), CNBC's Jim Cramer said Wednesday, even as the latter embarks on another deal perceived as being shareholder-friendly.
Intel plans to spin out its programmable chip unit through an initial public offering in the next two to three years, the company said Tuesday night. Intel used a similar strategy to take public its self-driving car technology unit, Mobileye (MBLY), in October 2022.
"You're selling the crown jewels in order to be able to finance what's not a crown jewel — that's putting money behind a hand that's not as good and throwing away some better" assets, Cramer contended Wednesday on "Squawk on the Street."
Under the leadership of CEO Pat Gelsinger, Intel has adopted a strategy that focuses, in large part, on advancing its manufacturing capabilities for its own processors and growing a business that makes chips for other semiconductor firms.
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Cramer said he prefers to continue owning Nvidia over Intel.
"I like Nvidia, and Nvidia is no financial engineering," said Cramer, whose Charitable Trust, the portfolio used by the CNBC Investing Club, has long owned Nvidia stock.
Optimism around Nvidia's artificial intelligence chips propelled its stock to a series of record highs and a market value north of $1 trillion earlier this year. However, over the past month, Nvidia shares have fallen about 10%.
"Right now everyone is against Nvidia," and worried that its stock price soared too high, too fast, Cramer acknowledged. "If you have the best chips, it really doesn't matter." He added, "Next year is going to be a very big year for Nvidia" as supply of its AI chips improves.
Here's a full list of the stocks in Jim's Charitable Trust, the portfolio used by the CNBC Investing Club.