CNBC's Jim Cramer said on Monday that semiconductor stocks are staging a 'revenge' trade after last week's sharp sell-off. Cramer stated the rebound reflects investors returning to the group after it was hit. The recovery follows a broad semiconductor sell-off late last week, as investors rotated away from artificial intelligence winners that powered much of the market's first-half gains.
Last Week's Semiconductor Sell-Off Details
A basket of chip stocks, the iShares Semiconductor ETF, fell 6.4% on Wednesday and 5.6% on Thursday, with the market closed Friday. Cramer said he believes Thursday's selling pressure was largely sparked by a report from The Information. The news organization reported that Anthropic is exploring a custom artificial intelligence chip with Samsung Electronics, which Cramer suggested raised concerns that major AI customers could rely less on traditional chip suppliers over time. Micron fell 5.5%, AMD lost 4.3%, and Marvell Technology dropped 9.8% on Thursday.
Monday Recovery Performance
By Monday, buyers had returned to semiconductor stocks. Intel, Arm, and Broadcom are all up over 3%. Cramer's Charitable Trust, the portfolio run by CNBC's Investing Club, owns shares of all three stocks.
Broadcom Extends Apple Partnership Through 2031
Cramer said Broadcom has further room to run after the chipmaker announced it had extended its partnership with Apple through 2031 to develop and supply custom chips. Apple is one of Broadcom's largest customers, making the agreement an important long-term win for the company, according to Cramer. Cramer has liked Broadcom for years because it's an integral design partner on custom chips for customers including Google. "This is terrific little piece of business that they're doing, they're going to ace it for Apple," he said of Broadcom.
Nvidia Faces Selling Pressure Despite Valuation
Nvidia is largely sitting out the comeback Monday following an industry research report about delays involving the company's next-generation Kyber rack-scale server system. With the stock trading for less than 19 times forward earnings, according to FactSet, Cramer argued the selling has become overdone. "There are so many long knives out for Nvidia," he said. "At a certain point we have to just say, does it really deserve the same multiple as a chemical company? Doesn't it have more upside value?"
FAQ
What did Jim Cramer say about chip stocks on Monday?
Jim Cramer said on Monday that semiconductor stocks are staging a 'revenge' trade after last week's sharp sell-off, with investors returning to the group after it was hit.
How much did semiconductor stocks fall last week?
The iShares Semiconductor ETF fell 6.4% on Wednesday and 5.6% on Thursday. Individual stocks including Micron fell 5.5%, AMD lost 4.3%, and Marvell Technology dropped 9.8% on Thursday.
What partnership did Broadcom announce?
Broadcom announced it had extended its partnership with Apple through 2031 to develop and supply custom chips, with Apple being one of Broadcom's largest customers.
