Cramer flags Wall Street rotation out of AI memory stocks
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- Jim Cramer told CNBC investors are taking profits in this year's biggest AI infrastructure winners and rotating into stocks with growth drivers away from the data center, calling it either "a broadening" or "fleeing."
- Western Digital hit an all-time closing high of $746 on June 18, up 333% year-to-date, then fell nearly 40% in under six weeks as investors bet AI server memory shortages won't last.
- Micron, Seagate, and Sandisk shares also tumbled after peaking in June, surrendering gains driven by the unprecedented pricing power those shortages created.
- ServiceNow rose roughly 11% month-to-date and Salesforce climbed about 16% as beaten-down software names caught bids in the rotation away from infrastructure plays.
- Costco and Walmart made recent runs while Johnson & Johnson hit an intraday all-time high after announcing a $5.5 billion settlement to resolve ovarian cancer talc litigation.
- Cramer said he remains bullish on Nvidia and Intel, arguing their businesses are supported by durable demand rather than the temporary pricing power that lifted memory makers.
- Cramer's Charitable Trust holds shares of Salesforce, Costco, Johnson & Johnson, Intel, and Nvidia — the same names he highlighted as rotation beneficiaries.
Why it matters: The rotation away from memory stocks cuts directly into the 333% year-to-date gain Western Digital had built by June 18, and the roughly 40% six-week drawdown shows how quickly parabolic moves unwind when investors question shortage duration. Retail investors who chased the AI infrastructure rally now face the exact question Cramer flagged: when to sell into strength before the cycle ends.
