Cramer is tempted to buy chipmaker, sell hyperscaler on DeepSeek sell-off
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 Monday’s key moments. 1. Stocks tanked Monday as Chinese startup DeepSeek’s lower-cost AI model sent shockwaves through the tech sector. Semiconductor stocks led the decline with Nvidia and Broadcom both dropping 13%. Investors fear hyperscalers may be overspending on AI as DeepSeek appears to show you may be able to build competitive language models without using expensive chips. Jim Cramer said the latest news leaves more questions than answers. “I don’t think we can necessarily make a conclusion about what to do.” 2. Jim sees a potential opportunity in chip stock Broadcom. “If there had to be a buy, it would indeed be Broadcom … it’s bigger than just AI.” He predicts this is the name the market could rally around instead of Nvidia because the company’s portfolio also includes networking solutions and infrastructure software. We most recently trimmed our position on Dec. 17 after the stock went parabolic following its fourth-quarter earnings. Meanwhile, Meta is on our radar for a trim. With shares up 12% to start 2025 and up 65% over the past year, Jim warned that “it’s up too high versus the rest of the Mag 7 stocks,” adding that the tech giant could be spending too much on its AI buildout. Meta announced Friday it plans to increase AI-related spending to up to $65 billion this year. 3. Salesforce was bucking the sell-off with shares up 2.4%. Jim called the company a “beneficiary” of all the concern about DeepSeek. CEO Marc Benioff sees the value of AI in making the software, not the hardware. Apple is holding its ground, too, with its stock up 2.5%. The iPhone maker isn’t investing billions of dollars in large language models, but is instead integrating the technology from other companies like OpenAI’s ChatGPT into its devices. (Jim Cramer’s Charitable Trust is long NVDA, AVGO, META, CRM. 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.
