• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Jim Cramer: Why This Group of Tech Stocks Should Be Avoided Right Now

What people should be wary of is a further spreading to other techs and talk of a slowdown in sainted data center growth.
By JIM CRAMER Dec 26, 2017 Updated Dec 26, 2017 | 11:36 AM EST
Stocks quotes in this article: MU, AMAT, LRCX, INTC, TXN, WDC

If someone were to tell me that Micron Technology (MU) would report an upside surprise of a pretty substantial magnitude and it would be unchanged I would say they would be crazy.

But that's what happened on Dec. 19 when it reported EPS of $2.45 vs. a consensus of $2.19.

How can this be? I think that the answer may be a budding consensus on Wall Street that thinks that the commodities of DRAM and flash are peaking for the cycle.

You get further confirmation from the disappointing stock prices for Applied Materials (AMAT) and Lam Research (LRCX) which, too, haven't come near their highs for the year.

Is supply out of balance with demand sooner than we thought? My judgment is that may very well be the case because I believe the end markets themselves remain robust.

What's intriguing here is that neither Intel (INTC) nor Texas Instruments (TXN) has seen any diminution of its rally. The same can't be said about Western Digital (WDC) , however, even after a Toshiba settlement with what I thought were very advantageous terms.

People always ask me "what do you worry about" as if I am supposed to have some incredible geopolitical or interest rate-driven response. To me, though, it's this potential peaking that I am concerned about. It flies in the face of almost all analyst commentary and it tells me that unless we see some "era of good feeling until the end of the year" spirit these stocks have to be avoided for now.

What people should be wary of is a further spreading to other techs and talk of a slowdown in the sainted data center growth. I don't see that being the case right now, but I am wary simply because Micron should be much higher given the lack of degradation in DRAM and only the smallest of declines in the pricing for flash.

Just something to monitor. But monitor closely.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Technology | Earnings | Markets | Stocks

More from Technology

Atlassian Is Now in the Latter Stages of Its Decline

Bruce Kamich
Jun 24, 2022 12:22 PM EDT

Let's check the charts and indicators.

Wolfspeed Could Start to Run With the Pack

Bruce Kamich
Jun 24, 2022 7:55 AM EDT

Here's how aggressive traders can play this tech stock.

Chinese Tech Company Ximalaya Pulls Planned IPO Yet Again

Alex Frew McMillan
Jun 24, 2022 6:30 AM EDT

Poor market conditions and the uncertain status of Chinese tech listings cause the podcast market leader to put off its Hong Kong IPO.

Will This Year's Energy and Commodity Trades Become Last Year's Tumbling Tech?

Helene Meisler
Jun 24, 2022 6:00 AM EDT

I can't remember the last time anyone asked me about Apple. No one cares.

Remember All the Hype Around Palantir?

Bruce Kamich
Jun 23, 2022 12:52 PM EDT

Here's how the charts look now.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:55 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 10 personality traits of successful traders an...
  • 12:08 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10

    As a Portfolio Name Agrees to a Merger, Here's Our...
  • 10:44 AM EDT PAUL PRICE

    My Very Best Pick for the Next 12 Months

    American Woodmark . It rarely gets better than th...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login