Jim Cramer Recommends Chip Stocks to Buy During Market Dip

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Jim Cramer believes that chip stocks have experienced an excessive sell-off, and he sees an opportunity for investors to buy on the dip. He pointed out that the reasons for being bullish on this sector earlier in the year are still valid. The semiconductor exchange-traded fund SMH, for example, has fallen over 18% from its July highs but remains up more than 25% year-to-date.

Cramer attributed the recent pullback to concerns about declining enterprise spending on artificial intelligence and worries over a potential recession before the Federal Reserve cuts interest rates. Nvidia’s recent quarter beat estimates but didn’t impress investors accustomed to massive outperformance, leading to fears that the AI boom may be short-lived. However, Cramer argued that Nvidia’s results reflect supply limitations rather than demand issues, maintaining that the AI boom is still “very real.”

Cramer highlighted several stocks in the chip sector worth considering:

  • AMD: Cramer praised AMD’s solid demand and performance, acknowledging its strong position in the semiconductor space.
  • Micron: Cramer sees Micron as a leader in memory chips and considers the stock undervalued based on next year’s earnings estimates. The need for memory in data centers presents a significant growth opportunity.
  • Arm: With licensing royalties providing steady revenue, Arm has seen its stock soar since its IPO. The stock got a further boost after reports indicated Apple would use Arm’s chip design for the iPhone 16.

 

Bitcoin Rebounds from Worst Week in Over a Year, Surges Above $57,000

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Bitcoin jumped back above $57,000 on Monday evening, recovering from its worst week in over a year. The cryptocurrency surged by 5.6%, reaching $57,444, according to Coin Metrics. This follows a 9% decline the previous week, marking its worst performance since August 2023.

Stocks linked to cryptocurrency, such as Coinbase and MicroStrategy, also saw gains of 5.2% and 9.2%, respectively, as the broader market recovered. The S&P 500 snapped a four-day losing streak, and the Nasdaq Composite climbed more than 1%, after suffering their worst weekly performance of 2024.

Bitcoin has remained in a relatively tight trading range throughout the year. Last week, it briefly dipped below the $55,000 mark, a significant floor for the digital currency. Analysts have noted the absence of strong catalysts for Bitcoin, making its price vulnerable to broader macroeconomic factors.

Seasonal trends have also played a role, as September has historically been a weak month for Bitcoin and other risk assets. Analysts at Bitfinex noted that stability in the U.S. equity markets could help Bitcoin recover further by reducing crypto ETF outflows, which have been exerting selling pressure on the cryptocurrency.

 

China’s Exports Surge by 8.7% in August, Exceeding Expectations

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China’s exports witnessed a significant increase of 8.7% year-on-year in August, surpassing the 6.5% growth predicted by a Reuters poll, according to data from the country’s customs agency. Imports, on the other hand, grew by only 0.5%, falling short of the 2% growth expected. In July, China’s exports rose by 7%, while imports outpaced predictions with a 7.2% increase.

China’s exports to its key trading partners—the U.S., the European Union, and the Association of Southeast Asian Nations (ASEAN)—also showed growth in August, with exports to the EU rising by 13%, the highest among these partners. The U.S. saw a 12% rise in imports from China, while imports from the EU fell. Meanwhile, imports from ASEAN increased by 5%.

In trade with Russia, China’s imports declined by 1%, whereas exports to Russia grew by 10%. The month also saw China’s exports of cars and ships surge by nearly 40%, while smartphone exports rose by 6.7%. Other sectors, like suitcase exports, saw a growth of 9%, and integrated circuits showed an 18% rise in exports, with imports climbing by 11%.

Despite this growth, the rare earths trade exhibited a decline, with rare earth exports falling by 1% and imports dropping by 12% in August. This decrease followed China’s recent policy to increase oversight of its rare earth industry for national security reasons. China also announced export controls on antimony, set to take effect later in September. Additionally, crude oil imports fell by 7% in volume during August.

In yuan terms, year-to-date exports increased by 6.9%, while imports grew by 4.7%. Exports have been a strong point for China amidst ongoing struggles to stimulate domestic demand. However, China faces growing trade tensions with the U.S. and EU, with tariffs on Chinese electric cars and other goods adding pressure.