CNBC Investing Club flags oversold market risks as AI stocks slide and oil tops $103

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AI stocks slide, oil up

Highlights

S&P 500 declines as AI-related stocks including Intel, Micron, Broadcom, and Nvidia fall, while West Texas Intermediate crude surpasses $103 and 10-year Treasury yield hits 5%.
CNBC Investing Club remains cautious on expanding Intel and Micron positions, awaiting potentially another 10% drop for more favorable entry points amid market weakness.
Cybersecurity stocks CrowdStrike and Palo Alto Networks surge over 14% and 12%, respectively, benefiting from increased cybersecurity spending as AI adoption raises vulnerabilities.

Market pressure reshapes trading stance

As reported by CNBC Investing Club, the S&P 500 falls Monday as investors react to Anthropic CEO Dario Amodei’s weekend essay urging a slowdown in AI capability development. Oil also rises, with West Texas Intermediate crude trading above $103 a barrel, while the 10-year Treasury yield reaches 5% for the first time since 2023.

That combination weighs on several AI and data center names held by the club, including Intel, Micron, Eaton and GE Vernova. Broadcom and Nvidia are also lower, and Jim Cramer says in an email to portfolio director Jeff Marks that it is difficult to act decisively with oil surging and AI stocks losing momentum.

Cramer repeats guidance he has given in earlier oversold markets, arguing that at times it is better to stay patient rather than trade aggressively. He is traveling to San Francisco and is set to host “Mad Money” from the West Coast on Monday, Tuesday and Wednesday, with Broadcom CEO Hock Tan scheduled to appear Monday night.

Chip buying plans and cybersecurity gains

The club says that caution is one reason it is not moving quickly to expand its Intel and Micron positions. Still, Cramer says the sharp declines are bringing both stocks closer to levels that could justify putting them on the shopping list once market conditions stabilize, adding that another 10% drop could create a more attractive entry point.

Jeff Marks says investors still have a great deal to assess, particularly around whether a slowdown in training new AI models would materially affect demand. He argues that inference, the day-to-day running of AI systems, is unlikely to cool soon and will continue to require substantial cloud computing capacity, which may help explain why hyperscaler stocks are holding up better.

Cybersecurity shares are among the biggest gainers from the shift in sentiment, with CrowdStrike and Palo Alto Networks jumping more than 14% and 12%, respectively. Even so, the club says it generally avoids chasing parabolic moves, while noting that CrowdStrike CEO George Kurtz has repeatedly highlighted rising cybersecurity spending as AI introduces new vulnerabilities.

Our earlier coverage of the sharp selloff in AI semiconductor and infrastructure names explained how renewed AI-safety warnings and calls for a coordinated slowdown in frontier model development were weighing on investor confidence. We also noted that the risk-off tone was amplified by surging oil prices and rising bond yields, while some software and cybersecurity stocks benefited as markets rotated away from the most crowded AI hardware trades.

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