Jim Cramer is keeping tech purchases on hold, saying the selloff has yet to produce the heavy-volume crescendo he associates with a market bottom.
Jim Cramer is not ready to buy tech. The CNBC host has yet to see the capitulation that marks a bottom, and he is holding back on tech purchases while the Nasdaq 100 trades 10.4% under its record close.
Speaking on CNBC's Mad Money, Cramer noted that the question of whether tech has gotten cheap enough has been going around for three months. Funding concerns have weighed on Oracle, which dropped almost 9% on Nov. 2 after unveiling a $20 billion debt and stock sale.
The signal Cramer says is absent is what he calls a crescendo — a pattern he often discussed with the late CNBC anchor Mark Haines.
In his telling, weeks of selling typically wind down with a single punishing session.
The give-away is a day that starts weak, finishes strong and comes on heavy volume, showing that sellers have given up.
“But the one thing really lacking is what I call a crescendo.”
Jim Cramer, host of Mad Money on CNBC, via YouTube
Friday's tech selloff, Cramer said, delivered despair without that turnaround. The Nasdaq 100 lost 4.1% that day.
Even so, Cramer conceded that the correction on its own might have set the low, with no crescendo at all.
Buyers, he said, may be willing to accept tech names that steer clear of heavy debt or equity issuance.
In that case, he said, Advanced Micro Devices (AMD) and Arista Networks (ANET) could take the lead rather than big caps that raise capital. Arista builds networking gear for data centers.
Nov. 2 was rough: AMD dropped 7.5% and Marvell Technology lost 13% after agreeing to an all-stock deal, 24/7 Wall St. reported.
BTIG, by contrast, advised investors in October to reduce chip exposure on rebounds, anticipating weakness that might run into 2027.
Separately, Blackstone says Anthropic may fail to win an investment-grade credit rating once it is public.
He also expects the election result to benefit data center stocks, no matter which side wins.
On Nov. 2, seven of the 11 S&P 500 sectors gained as money moved out of chips. That split points to investors weighing how the AI spenders are financing their build-outs.
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