Jim Cramer says chip stocks have gone 'parabolic,' and he's making moves with his own portfolio before it's too late

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Jim Cramer says chip stocks have gone 'parabolic,' and he's making moves with his own portfolio before it's too late Aditi Ganguly Thu, July 9, 2026 at 6:45 AM EDT 10 min read NVDA POET Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. CNBC's Jim Cramer is scared that the surge in semiconductor stocks could be setting up for a nasty pullback. In a recent Mad Money episode, Cramer focused his fears on the recent outperformance of the Philadelphia Semiconductor Index (SOX), which posted a historic 18 consecutive winning sessions in April. Even with a recent dip, the SOX has climbed very far and very fast, by roughly 30% in April (1). Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here's what it is and 3 simple steps to fix it ASAP JP Morgan sees gold hitting $6,000/oz before 2027 — and a gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one But what's really spooking Cramer about this rally is its resonance with one prior bull run: The only time the SOX did better than April 2026 was in February 2000, right before tech stocks hemorrhaged in the dreaded dot-com bubble (2). Back then, the SOX traded in the 1,100 range at the bubble's peak, but it fell as low as 238 a few years later (3). Granted, there were other impressive increases in the SOX's history that didn't correlate with declines and Cramer isn't quite ready to declare that we're headed for a similar crash this time around. But he did tell his viewers that these "parabolic moves all over the market" are "worrisome," CNBC reports (2). Cramer then presented some in-house analysis on U.S.-listed companies in the chip or AI data center sector that posted 50%+ gains since Mar. 30. According to his data, 94 companies fit this category, including big chip players such as AMD, Marvell Technology and Intel. And it's not just Cramer that's sounding alarm bells on semi and AI-related stocks. CNBC reports that Goldman Sachs and Morgan Stanley also feel these types of high-tech stocks are overextended and due for a decline. To illustrate why he's so fearful of a drop in chip stocks, Cramer pointed out one small semiconductor name that is already down big time: POET Technologies [NASDAQ: POET]. At the start of April, this semiconductor startup rode a massive wave of momentum from $5 per share to about $15 at its recent peak (4). However, one bad headline virtually erased POET's price pump. After news broke that Marvell Technologies wouldn't partner with POET, the stock cratered 47% in a day, MarketWatch reports (5). A week before POET's reversal, Cramer criticized the company as too small and speculative when a viewer asked about it on Mad Money . After mentioning POET on his show, the company had two days with over 20% increases, thanks in part to the extra media attention. Cramer now says the steep decline in POET's value should serve as a cautionary tale for overinflated expectations in the chip sector. As Cramer said on his show, "That's exactly the kind of thing that I'm worried about when I see all these parabolic moves" (2). Although Cramer has concerns about the sustainability of the latest tech rally, he hasn't gone full bear-market mode just yet. The Mad Money host is eyeing dips in some chip companies like Arm Holdings to jump in at better prices (2). But at these current levels, Cramer says he started selling a portion of winners like Qnity Electronics to lock in gains and avoid getting caught in a downturn, if it arrives. "When you see these kinds of moves, you don't need to freak out. But you've got to be disciplined," Cramer said. According to his strategy, that means taking some profits if you're up big and avoiding the "parabolic stuff like POET Technologies." Overall, Cramer wants everyone in the chip or AI trade to step back and take a chill pill. As he put it, "Keep your cool. And let's wait to see if we have a more benign pullback from these wild past few weeks, setting us up for more gains ahead." ​But Cramer still warned investors that "if the stocks keep flying, well, that is when you need to worry." Here are a few ways to weather potential headwinds. The AI trade has delivered enormous gains over the past two years, but it has also raised the bar for corporate earnings. Investors aren't simply rewarding strong results anymore — they're looking for evidence that massive AI investments will eventually pay off. "The debate has shifted away from near-term results and toward the sustainability of AI capex spending, amid concerns around its quantum, monetization and potential cash flow degradation," said Richard Clode, portfolio manager at Janus Henderson (5). Companies now have to prove that massive AI spending will generate meaningful long-term returns — not just impressive quarterly earnings. Take Wall Street's darling, Nvidia Corp. [NASDAQ: NVDA], for example. Despite reporting 75% revenue growth in its core data center business back in February, the AI chipmaker still saw its shares tumble more than 5% after earnings (6) as investors questioned whether expectations had simply become too high (7). And this sentiment isn't just limited to U.S.-listed stocks. Samsung recently posted its earnings for the April-to-June quarter — with preliminary operating profit surging roughly 19-fold from a year earlier, beating analyst expectations (8). Yet investors weren't impressed. Cramer said the results were "superb but not superb enough." Investors seem to agree, as the tech-heavy Nasdaq Composite index slid and the VanEck Semiconductor ETF (SMH) fell more than 3% on July 7 (9). Concentrating too much of your portfolio in a handful of megacap tech stocks can leave you exposed when sentiment shifts. Instead of keeping all your eggs in the tech basket, consider expanding your portfolio to include 500 of the largest U.S. companies across a much wider variety of economic sectors. The S&P 500 index includes companies across 11 diverse sectors — like financials, healthcare, industrials and energy — offering a more balanced investment (10). You don't need thousands to begin investing in the S&P 500 index. Consistency often matters more than the size of your first investment. Small contributions made regularly can snowball into substantial savings, thanks to the power of compound growth. You can even start with spare change from everyday purchases, which can add up and have a meaningful impact over time. For instance, investing just $20 per week for 30 years could grow to more than $179,000, assuming it compounds at 10% annually (11). Automating the process can make staying consistent much easier. Apps like Acorns allow you to turn your spare change from everyday purchases into an investment opportunity. This way, you can steadily grow your investments without dramatically changing your spending habits. Signing up for Acorns takes just minutes: All you have to do is link your cards and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio managed by experts at leading investment firms like Vanguard and BlackRock. Owning an S&P 500 index fund can help reduce company-specific risk, but it doesn't eliminate market risk altogether. If there's a broad market sell-off, even diversified equity portfolios can take a hit. That's why many investors also look beyond the stock market altogether. With geopolitical tensions resurfacing and inflation remaining a concern, adding assets that don't always move in lockstep with stocks can help smooth out returns over time. Gold has long been viewed as a reliable hedge against systematic market risk. During periods of economic uncertainty, persistent inflation or geopolitical turmoil, investors often turn to the precious metal as a defensive asset — pushing prices higher. That demand has helped gold prices more than double over the past five years, hitting multiple record highs along the way and outpacing the S&P 500 over the same period. Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA. With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver . If you're curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today . Another asset class that doesn't always move in tandem with the stock market is real estate. Property values are driven by a different set of economic factors, making real estate another useful way to diversify a portfolio. In addition to potential appreciation, rental properties can generate steady income through rent payments, giving investors another source of returns outside the stock market. The catch, of course, is that buying an investment property means a large upfront investment in the form of a down payment. Not to mention, ongoing responsibilities like finding reliable tenants, handling maintenance and paying for unexpected repairs can quickly become a second job. That's where platforms like Arrived come in. Backed by world-class investors like Jeff Bezos, Arrived lets you purchase shares of vacation and rental properties across the country. And you can get started with as little as $100. Arrived distributes any rental income generated by properties to investors monthly, allowing you to potentially set up a passive income stream without the extra work that comes with being a landlord of your own rental property. The best part? For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match . Those with more capital on hand can expand beyond short-term vacation rentals. For accredited investors looking to diversify beyond public equities, Bonaventure offers access to institutional-grade multifamily real estate investments in high-growth markets with a minimum investment of $25,000. Bonaventure focuses on income-producing apartment communities, offering potential tax advantages through structures like 1031 exchanges and UPREITs, allowing you to build passive income and wealth while the company manages the properties. 'I was wrong': Robert Kiyosaki makes rare confession as gold crashes — but doubles down on his $35K prediction. Why he says the rich are buying now The tax breaks in Trump's 'big beautiful bill' expire after 2028 — and experts say most people won't act in time. What to do before the window closes When he dies, Warren Buffett said 90% of his wife's inheritance will go into a single investment. Here's why (and how you can do it too) I'm 49 years old and have nothing saved for retirement. What do I do? Don't panic. Here are 10 ways to catch up fast We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines . Investing.com (1) ; CNBC (2) , ( 5 ), ( 6 ), ( 7 ), ( 9 ); MarketWatch (3) , (5) ; Yahoo Finance (4) , ( 8 ); Investopedia ( 10 ); Acorns ( 11 ) This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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