Observed Signal · May 20, 2026 · Earnings Report · Source: CNBC Technology · Impact: 4/5 · Sentiment: Neutral
Cramer: Tech Investing Has Shifted to AI Chips
CNBC host Jim Cramer said the tech investing landscape has permanently shifted from software to semiconductor and AI infrastructure stocks. His remarks followed Nvidia’s quarterly earnings beat, in which the chipmaker reported $1.87 adjusted EPS and $81.62 billion in revenue. Cramer argued that AI models from companies such as Anthropic and OpenAI, combined with powerful hardware from vendors like Nvidia, AMD, Arm, Intel and Broadcom, are enabling businesses to automate tasks previously addressed by enterprise software, pressuring traditional SaaS pricing power. He noted index moves this year — a large gain for semiconductor ETFs and a decline for expanded tech-software ETFs — and cautioned investors to abandon a software-first mindset.
The piece ties Nvidia’s major earnings beat to a broader market rotation toward semiconductor and AI infrastructure stocks — a shift that affects enterprise software valuations and capital allocation across the technology sector.
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Key Takeaways & Evidence Grounding
- Jim Cramer said semiconductor and AI infrastructure stocks have replaced software as the market’s technology leaders.
- Nvidia reported adjusted earnings of $1.87 per share and revenue of $81.62 billion for the quarter.
- The iShares Semiconductor ETF has climbed roughly 72% year-to-date while the iShares Expanded Tech-Software Sector ETF has fallen about 12% (per Cramer’s comments).
- Cramer named Nvidia, AMD, Arm, Intel and Broadcom as major suppliers of AI computing infrastructure driving the shift.
- Cramer said generative AI models from Anthropic and OpenAI enable businesses to build cheaper automation that competes with traditional enterprise software.
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Cramer: Be Selective in the AI Frenzy
CNBC’s Jim Cramer urged investors to be more discerning amid a broad rush into AI-related semiconductor stocks, praising the sector’s long-term potential but warning against speculative excess. He highlighted Cerebras’s blockbuster IPO — which priced at $185 and opened substantially higher, briefly valuing the company near $100 billion — as an example of frothy market behavior. Cramer said he remains bullish on the AI buildout but recommends favoring established winners such as Nvidia and Cisco, and cited memory and storage names like Micron, Sandisk and Western Digital as reasonable plays if supply shortages and strong AI demand persist. He advised investors to exercise discipline and understand company fundamentals before buying into the rally.
Cramer: Look beyond tech amid AI uncertainty
Jim Cramer advised investors to reduce exposure to technology stocks amid heightened uncertainty in the AI trade, recommending putting new money into high-quality companies outside tech for lower volatility. He named financials and industrials such as Goldman Sachs, Wells Fargo, FedEx, FedEx Freight, Honeywell and Boeing as attractive alternatives and said his CNBC Investing Club Charitable Trust owns those names. Cramer said he remains bullish on long-term AI chip leaders Nvidia and Intel, calling Nvidia dominant in data centers and describing Intel as a "triple play" because of its CPU, packaging and foundry businesses. He is waiting for a broader washout in technology before adding meaningfully to the sector.
Cramer: It's Not Too Late to Own AI Winners
CNBC host Jim Cramer said the market is being driven primarily by enthusiasm for semiconductors and data-center/AI infrastructure stocks, calling many of those companies “foundational or generational.” He urged investors to own companies tied to data centers and chipmaking while warning against concentrating an entire portfolio in that complex. Cramer highlighted a slate of upcoming earnings (Constellation Energy, Qnity Electronics, On Holding, Under Armour, Nebius, Cisco Systems, Applied Materials) as next‑week catalysts and noted broader market strength with technology the S&P 500’s top-performing sector for the week. He described AI as creating an “agentic” shift in the economy but recommended diversification and buying on occasional down days if possible.
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