Cramer says the AI trade is not going away as Nasdaq enters correction
Every weekday, the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s key moments. 1. Stocks plunged Thursday, reversing much of the previous session’s rally as investors fled technology stocks for more defensive sectors. The tech-heavy Nasdaq Composite tumbled 4.2%, entering correction territory after falling more than 10% from its record high last month. The S & P 500 dropped 2.9%, while the Dow Jones Industrial Average shed 2.2%, giving back more than half of Wednesday’s gains. Jim warned Wednesday that Wall Street’s enthusiasm following the midterm elections could prove short-lived. Healthcare, consumer staples, and utilities held up relatively better amid the broader market turmoil. 2. At the heart of the tech rout were growing concerns that financing challenges and increased political scrutiny could slow the massive AI data center buildout. Meta executive Dina Powell McCormick warned at a Wall Street Journal conference that building new data centers is “going to be harder.” Jim agreed that construction will likely slow but stressed that “it’s certainly not going to go away.” The pressure extended from semiconductors to cybersecurity stocks, including Club holdings CrowdStrike and Palo Alto Networks . Even strong earnings from AMD and Qnity offered little protection. Jim said the weakness reinforces the Club’s decision to exit Broadcom , Corning and Arm to reduce its AI exposure. We’re maintaining positions in Micron and Qnity, however, to preserve exposure to the theme’s long-term growth potential. 3. Cardinal Health surged 5% Thursday after delivering strong fiscal first-quarter results and raising its full-year outlook, driven by strength in its pharmaceutical and specialty distribution business. While Jim remains bullish on the company and CEO Jason Hollar’s strategy, he cautioned that “parabolic moves should be sold, not bought.” That’s why we trimmed our position following Thursday’s sharp rally. Kimberly-Clark also reported better-than-feared results and reaffirmed its full-year outlook despite continued sales pressure in China. Jim remains optimistic about the company’s longer-term prospects following its acquisition of Kenvue but wants more details on the expected synergies. 4. Stocks covered in Thursday’s rapid fire at the end of the video were: Cisco , Dutch Bros , Shake Shack , and Ralph Lauren . (Jim Cramer’s Charitable Trust is long CRWD, PANW, Q, MU, CAH, KMB. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
