Semiconductor stocks lost around $1 trillion in market value on Friday, with Intel Corp. (NASDAQ:INTC) shares plunging over 28% in a day.
Intel’s fourth-quarter outlook landed well short of expectations, triggering the decline. Nvidia Corp. (NASDAQ:NVDA), Advanced Micro Devices Inc. (NASDAQ:AMD), Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) and Broadcom Inc. (NASDAQ:AVGO) also declined, pushing the Nasdaq down 2.86%.
Jim Cramer’s Warning Amid Midterms, Earnings
"Mad Money" host Jim Cramer said Friday that Wall Street’s next stretch could stay jumpy, arguing investors are still wrestling with whether massive artificial intelligence outlays are paying off fast enough to support technology valuations.
Cramer on CNBC said that the coming week stacks several potential catalysts on top of an already shaky backdrop, including major earnings, the monthly jobs report and the midterm elections.
He urged investors not to get cute trying to time a tech bottom and instead focus on higher-quality names that may be getting sold indiscriminately.
"After a brutal week for tech, don’t assume the worst is behind us," Cramer said.
"Don’t try to call the bottom in the Nasdaq just yet. Pick up some high-quality companies that are being thrown away," he added.
Intel’s Pressure Point
One pressure point highlighted by Intel’s update is that booming data center demand does not automatically translate into smooth shipments when components are tight.
Intel’s Data Center and AI unit posted 78% revenue growth to $7.3 billion in the third quarter, but the company also pointed to wafer and substrate shortages that could limit server deliveries until the second half of 2027.
Analysts also tied Intel’s weakness to the PC market, where the company said high memory prices are making machines harder to sell at scale. Intel guided fourth-quarter revenue to $15 billion to $16 billion, below the roughly $17.1 billion consensus, and warned the slowdown could extend through the first half of 2027.
Can Upcoming Earnings Calm Market Anxiety?
Cramer’s calendar for the week ahead leans heavily on results from bellwether tech names, starting with Apple Inc.’s (NASDAQ: AAPL report Monday after the close. He said he still wants to own Apple, but also flagged that a valuation near 40 times earnings leaves little cushion if expectations are missed, according to the report.
Tuesday brings AMD’s earnings, which Cramer framed as another checkpoint for semiconductors after Intel’s stumble. In the same chip shockwave, the iShares Semiconductor ETF (NASDAQ:SOXX) sank 8% and the PHLX Semiconductor Index fell 7.1%, marking its second decline of more than 6% in a little over a week.
How Election Outcomes Could Impact Tech Investments
Cramer also put Tuesday’s midterm elections on his list of reasons volatility could linger, watching for any shift in Washington that might complicate data center development. He said political pushback against facilities could slow construction and hit businesses counting on AI infrastructure spending, while noting some states remain receptive.
Macro data could add another layer on Friday when the monthly jobs report arrives, which Cramer expects to show solid hiring but restrained wage growth.