Stock futures traded higher on Tuesday, indicating that Wall Street will recoup some losses from Monday’s sell-off as investors turned their attention to a slew of earnings reports.
Jim Cramer of TheStreet discussed the semiconductor industry with Jeff Marks, senior analyst at Action Alerts PLUS.
Nvidia (NVDA) – Get Report shares rose as the chipmaker prepared to begin trading on a split-adjusted basis.
Shares also rose 15% on Monday, while many of its competitors swooned on Monday.
Cramer: ‘Choose one and buy some here’
In his recent Column Real MoneyCramer said, “There is a huge demand for these chips, but Wall Street got too excited.”
He added, “I think you pick one and buy a few here.”
“The semi-finals go up as long as there’s a shortage,” Cramer told Marks, “and then the semi-finals start to fall where there’s equilibrium, not when prices fall. Equilibrium is a predictor of prices.”
Many investors are selling Micron Technology (MU) – Get Report and advanced microdevices (AMD) – Get ReportCramer said, “and they don’t even think about the idea that maybe these stocks aren’t as cyclical as we think and there’s huge demand for them that’s out of sync with the economy.”
“I really think AMD and Nvidia have very little to do with the economy and a lot more with high-performance computing,” he said, “which is obviously evident with social media. You need high-performance computing.”
Cramer advised “take a closer look at some of the stocks that are falling”.
“I’m not saying you should buy Cisco (CSCO) – Get Report‘ he said, ‘Cisco is not often down. Sales team (CRM) – Get Report just had a major overhaul. … You want to see if the shares [have] straight down, and then you do some shopping.”
AMD, Cisco, Nvidia and Salesforce are stakes in Jim Cramer’s’ Action Alerts PLUS investment club. Would you like to be warned before Jim Cramer buys or sells the shares? Learn more now.