Tech stocks show broader leadership signs as chip, software names gain favor

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Tech stocks show broader leadership

Highlights

Broadcom and Micron gains supported major averages on Tuesday, signaling a possible shift in tech leadership away from Nvidia, Microsoft, Alphabet, and Meta.
Oracle shares jumped nearly 6% as Advanced Micro Devices and Arista Networks reported strong quarterly results, boosting investor sentiment toward non-megacap tech stocks.
Rising community opposition to data center projects and ongoing geopolitical risks with Iran create continued market uncertainty for technology stocks despite recent one-day gains.

Shift in tech leadership emerges

As reported by CNBC, Jim Cramer said Tuesday that a different group of technology stocks may be starting to lead the market after several large-cap names struggled to maintain recent rallies.

He said gains from Broadcom and Micron helped support the major averages during Tuesday's session, pointing to a possible shift away from heavyweights such as Nvidia, Microsoft, Alphabet and Meta. Cramer also highlighted Advanced Micro Devices and Arista Networks after both companies report strong quarterly results following the close, while Oracle shares jump nearly 6% in the session.

Cramer said he wants to believe that tech stocks outside the biggest market favorites can lead the sector higher. Still, he cautions that one constructive trading day is not enough to confirm a durable recovery after months of failed rebounds.

Data center and geopolitical risks remain

He identified rising opposition to data center development as one of the main risks for the sector. Local communities are pushing back over concerns about electricity costs and water use, a trend that could leave smaller developers such as Iren, Nebius and CoreWeave more exposed if projects are canceled or moved, while larger companies including Amazon have greater flexibility to find alternative sites.

The war with Iran also remains a source of market uncertainty. Although oil prices move lower Tuesday on hopes for progress in U.S.-Iran negotiations, Cramer said Wall Street has repeatedly underestimated the risk of further escalation, making it difficult to rule out renewed pressure on equities.

He does not say the sector has reached a lasting bottom and adds that he would prefer to wait for a clearer turning point before committing too much money back into technology shares.

Our earlier update on Micron Technology’s weakening technical setup explained that the stock had slipped below a rising wedge on the weekly chart, a pattern that often signals a fading rally. We noted that declining RSI and MACD momentum pointed to possible downside toward key support zones unless Micron can reclaim major resistance levels.

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