Jim Cramer just went on air to declare that Intel, currently holding the crown as the third-best S&P 500 stock in 2026, still has plenty of fuel left in the tank. He thinks it can climb another 40%. If you told anyone on Wall Street a few years ago that Intel would be crushing the market, they would've laughed you out of the room. Yet here we are in mid-2026, and the legacy chipmaker is up a jaw-dropping 278% for the first half of the year alone.
Most investors are completely misreading this rally. They think it's just a speculative bubble driven by the endless hunger for anything related to silicon and data centers. It's not. The real story here is about a structural supply shift and a massive corporate turnaround that's finally hitting its stride.
If you're wondering whether you missed the boat on this massive turnaround or if Cramer is right about that extra 40% upside, you need to look at the raw mechanics driving the market right now.
The Madness Behind the 2026 Intel Turnaround
Wall Street spent the last few years dumping software stocks and piling into physical infrastructure. Investors stopped paying for the distant promise of software applications and started buying into the actual plumbing of the modern internet. That shift completely transformed the fortunes of hardware manufacturers.
Look at the numbers for the first half of 2026. Sandisk leads the index with wild gains, Micron sits comfortably in second, and Intel is firmly holding the spot as the third-best S&P 500 stock in 2026.
Top S&P 500 Performers (First Half 2026)
1. Sandisk (Up 858%)
2. Micron Technology (Up 304%)
3. Intel (Up 278%)
The reason Intel is flying comes down to its forward price-to-earnings ratio and a massive upward revision in earnings estimates. Analysts spent the last six months aggressively upgrading their rolling 12-month earnings-per-share forecasts for the company. The forward P/E ratio, which sat at a sky-high 103.8 at the start of the year, compressed rapidly down to around 61.2 because the actual earnings power of the business is growing faster than the stock price.
What Most People Get Wrong About the Legacy Chip Boom
The loudest critics keep pointing out that Intel isn't manufacturing the ultra-high-end graphic processors that dominate the headlines. They're missing the point. The build-out of massive industrial data centers requires an absurd amount of basic processing units, advanced packaging, and memory integration.
You can't run a world-class facility on graphics cards alone. You need the foundational computing architecture that Intel builds.
I've watched retail investors repeatedly make the mistake of chasing overhyped software platforms while ignoring the factories actually making the components. Intel spent billions building out its domestic foundry capabilities, a strategy that looked expensive and painful two years ago but looks brilliant today. Governments and giant enterprise buyers want secure, reliable geographic diversification for their hardware supply chains. Intel is one of the very few players that can actually deliver that at scale.
Why Cramer Thinks There is Another 40% on the Table
When Cramer states a stock can jump another 40% after already gaining 278%, it sounds like classic financial television hype. But when you unpack the numbers, the math isn't as crazy as it looks.
A 40% gain from current levels relies on two specific triggers. First, the corporate enterprise upgrade cycle is running behind schedule. Thousands of companies are still running older server architecture that simply cannot handle modern workload demands. When those companies upgrade over the next twelve months, Intel captures a massive, high-margin slice of that volume.
Second, the margin expansion from their new manufacturing nodes is finally showing up on the balance sheet. For years, Intel suffered from terrible yields on its newest manufacturing processes, which dragged down profits. Now that those yields are stabilizing, every single chip rolling out of their factories is significantly more profitable than it was last quarter.
The Real Risks Wall Street is Ignoring
It's dangerous to blindly buy into a massive run-up without looking at the dark side. The stock market is heavily bifurcated right now. While hardware is soaring, software and consulting companies are getting completely slaughtered.
If the broader economic environment causes capital expenditure budgets to cool down even a little bit, the massive spending on infrastructure could slow down. Intel has a lot of fixed costs. If demand drops, those giant factories become incredibly expensive liabilities very quickly.
There's also the reality of valuation. Trading at over 60 times forward earnings means the company has zero room for mistakes. If they miss an earnings target by even a penny, or if a product launch gets delayed by a few weeks, the market will punish the stock mercilessly.
Your Next Steps to Play This Market
Don't just jump in and buy a full position at the absolute highs of a historic rally. That's a quick way to lose your shirt on a natural market pullback.
If you want to act on this trend safely, use a dollar-cost averaging strategy over the next three to six months. This lets you build a position without worrying about picking the perfect day to buy.
Keep a very close eye on the capital expenditure reports from major cloud providers during the next earnings season. If their infrastructure spending continues to climb, it validates Cramer's thesis. If that spending starts to plateau, it's your cue to sit on your hands and wait for a better entry price.
Keep your position sizes reasonable. A stock that moves this fast can break your portfolio if you overleverage yourself.
