This article examines “Don’t Ignore This Market Rotation: Jim Cramer’s Views on Micron, Western Digital, and More”. Please visit “Don’t Ignore This Market Rotation: Jim Cramer’s Views on Intel, Vertiv, TSMC, and More“ if you’d like to see the extended list and methodology behind it.
5. Micron Technology, Inc. (NASDAQ:MU)
Micron Technology, Inc. (NASDAQ:MU) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer explained how to buy the stock, as he remarked:
The fairly similar Micron sells for less than 12 times earnings, and it seems compelling, down 6% today. I’ve been waiting for Micron to come down. This may be the opportunity [buy, buy, buy]… So what do you do as someone who’s always looking for bargains? I think Micron’s the only possibility that I heard in that whole list. It’s the hardware stock that can most easily turn itself around in the next move higher. I’d buy some right here and then wait for another, say 2 to 3% decline, to buy more. That’s how I’d get started.
Micron Technology, Inc. (NASDAQ:MU) develops memory and storage solutions, including DRAM, NAND, and SSD products, under the Micron and Crucial brands. Cramer highlighted the company while discussing the memory and storage supply shortage during the May 8 episode, as he commented:
These days, the big winners are the memory and data storage stocks. Micron’s up 777% over the past 12 months alone. Sandisk’s up 4,162%. Western Digital’s gained 984%. Seagate jumped 712% over the same period. But these are real companies that make real things. And right now, they’re practically just printing money simply because there’s so much demand and so little supply. Believe it or not, but they may all be undervalued because of this fourth industrial revolution… Earlier this week, I told you that some stocks are galloping higher because they have to go where they have to go. It sounded like circular reasoning, I understand that.
We keep seeing it happen, though. Micron rallied another 15% today to $746. Why? 746, why? Because it’s going to $1,000. It needs to go through the 700s, 800s, and 900s to get there. Even after… $1000, the stock would still be pretty… cheap on an earnings basis. Micron can keep running because there’s endless demand for its chips from the data center companies and not enough supply, so pricing just gets better and better and better. Right now, the stock sells for just six times earnings. Same exercise with Sandisk. In fact, it could be even cheaper than Micron, despite already rallying a lot harder.
So what do you do? Unlike the old days when we were flipping the dot-com IPOs, you gotta pick some of these moonshots and stick with them… As long as you have some cash on the sidelines and your portfolio has some diversification, you have my blessing to buy these red-hot stocks, even if you missed them, even if you missed a lot, even if you’re just getting in on Monday. If you have nothing but the memory plays and someone comes up with a… mousetrap, you’re going to lose a lot of money, hence the need to diversify among the plays. But of all the people I’ve talked to in the business, nobody knows of anyone who’s even trying to tackle a memory shortage, so these stocks keep running and running. And it’s not too late to buy them here because the price-to-earnings multiples are simply too low.
4. Western Digital Corporation (NASDAQ:WDC)
Western Digital Corporation (NASDAQ:WDC) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer mentioned the stock during the episode and said:
Western Digital’s down nearly 5%. It’s a memory stock that trades at 46 times earnings. That seems too rich to me.
Western Digital Corporation (NASDAQ:WDC) designs and supplies data storage solutions, including internal and external hard drives, portable drives, data center platforms, NAS systems, and related accessories. Cramer highlighted the company during the February 2 episode and stated:
Western Digital, the company that spun off Sandisk about a year ago, was in fifth place, up 45%. Micron is run by Sanjay Mehrotra, one of the founders of Sandisk. Strong bloodlines there… Wow, up big. Seagate was in third, up 48%, and Micron was in fourth, up 45%. Now, all these memory and data storage plays more than tripled last year thanks to surging demand from the data center, which is driven by artificial intelligence…
Western Digital also reported Thursday night, delivering a solid beat with excellent guidance, and the stock actually finished down more than 10% on Friday. Stock erased some of those losses today as the data storage plays came roaring back. But you have to keep in mind, sooner or later, someone’s going to add more production capacity, if not the American companies, then the Korean competitors. And once more capacity comes online, it might be hard to maintain these sky-high prices, but I don’t see any supply within this realm.
3. Comfort Systems USA, Inc. (NYSE:FIX)
Comfort Systems USA, Inc. (NYSE:FIX) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer showed a bearish sentiment towards it, as he said:
Comfort Systems is a heating, ventilation, air conditioning company with plenty of data center exposure, but it’s a $1,854 stock that’s nearly doubled year to date. I’m not messing with that one.
Comfort Systems USA, Inc. (NYSE:FIX) provides mechanical and electrical services, including the design, installation, and maintenance of HVAC, plumbing, and fire protection systems. A caller asked for Cramer’s advice regarding the stock during the January 27 episode, and he responded:
I have to tell you, I liked that stock when it was like… I don’t know, like 20 bucks, and I should’ve just said over and over again, keep buying it. Very much like Mueller’s. Just like one of these stocks, I think you put some on, and then if it comes back down, for heaven’s sakes, you buy more. It’s a great company.
2. Qnity Electronics, Inc. (NYSE:Q)
Qnity Electronics, Inc. (NYSE:Q) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer noted that it is part of the Charitable Trust portfolio, as he commented:
I go down the list of stocks in the S&P 500 that are down the most and see if there’s anything that kind of strikes my fancy. Incredibly, many of today’s market’s worst performers were indeed linked to the data center. Qnity Electronics, a material company used by chipmakers, is down 5%. We own this one for the Charitable Trust. It’s had a parabolic move. Even after this pullback, I think it’s too expensive for the moment.
Qnity Electronics, Inc. (NYSE:Q) provides materials and chemical solutions used in the manufacturing of semiconductors and electronic components. Cramer mentioned the stock during the April 27 episode and said:
After today’s pullback, the SOX is up 46% above its 200-day moving average, not perfect. At the end of February 2000, SOX was up 96% from its 200-day moving average. Alright, we’re not even half as overextended as we were back then. So I, look, I’m concerned too, okay? I don’t like rapid moves, I don’t like parabolic moves, and lately we’ve seen a lot of parabolic moves all over the market, and those are worrisome.
I don’t want to overreact, but we’ve been taking some action around the edges for the Charitable Trust on the sell side… For example, last Thursday, the Charitable Trust trimmed some of its position in Qnity Electronics. That is a DuPont spinoff that makes specialized materials for semiconductors, and it rallied 30% from March 30th to April 23rd. No, too fast.
1. ServiceNow, Inc. (NYSE:NOW)
ServiceNow, Inc. (NYSE:NOW) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer mentioned the stock while discussing the conditions of its industry, as he stated:
The software thesis is about companies like Salesforce, ServiceNow, Workday, and Adobe… All beaten down, stocks that trade together as part of a basket. The software stocks are wildly emotional traders. They’ve been trounced for ages and are trying to bottom, but if you had bet on a bottom in these things, so far, you’ve been crushed. Each time we get a day like today with the software stocks making giant moves, people are convinced that it’s real. They look at ServiceNow up over 8% on a Buy recommendation from Bank of America and say it just has to be done going down.
It’s down 32% for the year, for heaven’s sake. Or they kick the tires of Salesforce, which is also down 32%. I think perhaps the two have bottomed because Bank of America actually started its research on Salesforce with a Sell, and it rallied 3% anyway. If it weren’t for the centrifugal ETF force that took it up, I might say it’s done going down, too, but I just don’t know. I recognize that it always feels compelling to bet on the underdog, or you might call them bottom feeders than to go for the otherwise winning stocks that just so happened to get hit very hard today. But I want to buy winners on a momentary slide, not losers that may just be resting before the next decline.
ServiceNow, Inc. (NYSE:NOW) provides a cloud platform that supports digital workflows through AI, automation, low-code tools, analytics, and a suite of IT, security, customer service, and employee experience products.
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