Semiconductor stocks remain supported by chip demand after six-day slide, Cramer says

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Semiconductor stocks hold on chip demand

Highlights

VanEck Semiconductor ETF dropped 7.2% over six consecutive sessions, with declines attributed partly to higher oil prices and interest rates pressures.
Micron secured 26 long-term take-or-pay contracts covering 35% of revenue through 2030, enhancing revenue visibility despite ongoing sector sell-off.
Growing demand for advanced computing, AI, and smart devices supports sustained chip demand, benefiting companies like Micron, Intel, and AMD beyond short-term sentiment.

Chip demand and contract visibility

As reported by CNBC, Cramer says investors should not abandon semiconductor stocks simply because the group is selling off in tandem, arguing that underlying demand for chips remains strong across consumer and enterprise applications.

The VanEck Semiconductor ETF has fallen 7.2% over six consecutive sessions, and Cramer warns that higher oil prices and interest rates could extend the decline. Even so, he says the broad retreat is causing stocks with different business profiles to trade together, making it harder for the market to distinguish between weaker sentiment and solid operating fundamentals.

Cramer points to Micron as a case where the wider sell-off is overshadowing company-specific strengths. He says demand for memory chips continues to exceed supply, helped by the artificial intelligence build-out, and notes that Micron has 26 long-term customer agreements covering about 35% of revenue through 2030, with talks already underway for 2031.

He adds that the take-or-pay structure of those contracts gives Micron clearer revenue visibility because customers remain committed financially. In his view, that kind of contractual backing reduces uncertainty around future sales even during a sector downturn.

Broader semiconductor use cases

Cramer also argues that chip demand is being reinforced by the growing computing requirements of modern devices. He describes a visit to an Apple showroom where he sees products featuring a more personalized Siri and more advanced smart home technology, which in his view illustrates how more sophisticated electronics need additional computing power and memory.

That demand story is not limited to memory, he says, highlighting Intel and AMD as suppliers of CPUs that serve as core components for a wide range of machines. The spread of those processors across everyday devices and systems, he argues, supports the case that semiconductor demand is rooted in expanding use cases rather than short-term market enthusiasm alone.

While Cramer acknowledges the group could suffer further losses after a sharp run-up, he maintains that the gains in stocks such as Micron, Intel and AMD are tied in large part to real demand. He says investors should focus less on semiconductor indexes and more on the products and services that increasingly depend on chips.

Nvidia’s minority investments in four French AI startups—Doctolib, Genesis AI, Entalpic and Pigment—highlight how major chipmakers are expanding their ties to software and application developers as AI adoption accelerates. Our earlier report noted that the deals strengthen Nvidia’s footprint in France’s AI ecosystem across areas like healthcare and enterprise software, even as the financial terms were not disclosed.

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