9AM Hour: Chips Extend Slide, Software and Yields Jump, What Intel's CEO Told Cramer 5/19/26

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Jim Cramer (0:59)

It's Jim Cramer here. You're listening to the opening bell of CNBC Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (1:12)

Good Tuesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Mondays, momentum unwind, gonna get a little more traction today. As semis are down, software's up. Yield pressure, once again, the story with a long bond of 5.15, highest since the run up to the great financial crisis. Oil's a touch lower, but Brent is holding 1.1 as the president says he called off strikes on Iran that were set to begin today.

Our roadmap begins with semistocks once again sliding in the pre-market. Western Ditch, Sandisk, Seagate, among the biggest laggards on the S&P.

David Faber (1:44)

Plus AI in court, a federal jury ruling against Elon Musk, saying he waited too long to sue OpenAI and its CEO Sam Altman. Meantime, Anthropic heads to federal court this hour, that is in its legal challenge with the Pentagon.

And a quick look at earnings. Home Depot beats in the top and bottom lines. Company says the core shopper remains resilient.

Carl Quintanilla (2:08)

Let's begin with the semis today on track to extend their two-day slide. Jim, Sox had 24 names down yesterday, only six up.

Jim Cramer (2:17)

Yeah, okay, so let's just go into this for a second.

You have these incredible moves and they have to digest.

I just hear over and over again, the demand for the semis is insane. I do not hear the demand for the software is insane. As a matter of fact, I was joking with Lip-Bu Tan, who is the CEO of Intel, about the software as a service is really something that has come, its day has come and that's great. David, I look at these and I say, okay, service now, up a quick 12, up 12? Today's 12? What do you got there? What do you got there for me? Up 12? What do you got? Do I have 106? So I want to set, I want to set, oh, and then you walk it back, because I'll tell you why you walk it back. Because this is what I call a squeeze, a genuine homespun squeeze led by this ETF that everybody tries to manipulate. Yes, manipulate, that's a strong word, not really. Which all you got to do is follow Microsoft, because Microsoft's had a real big move. What's that about? What do you got there?

David Faber (3:15)

I don't have anything for you on the Microsoft.

Jim Cramer (3:17)

Sold to you for $420.

David Faber (3:18)

I do know, obviously, we had enormous momentum in the semi names for quite some time. To the extent that hedge funds had a basket of longs, it was made up of semis, and the shorts were made up of the names you just mentioned as well. On the software side, for obvious reasons, whether it be the shortage of chips in terms of potentially in terms of memory, whether it be the growth in CPU demand as a result of the agentic era in the data center, or the agentic era and what that means in the data center for the ratio of GPUs to CPUs, but that suddenly has reversed. Why exactly that's happened? I can't tell you, but once it starts, Jim, I will defer to you. When does it end?

Jim Cramer (3:52)

Now this happens when you start seeing the stocks that don't really have. When you see an Atlassian just exploding with senior energy left there and put the stuff up about what Atlassian does.

When you hear CEOs say to you, okay, listen Jim, I know you like these software servers. You probably like those four-year contracts where every year they put an escalator. Well, let me tell you what they're like now. It's two years and I'll come back to you. Or let me tell you what it's like now. I called some 23-year-old kid and I said, sit on that Anthropic, go get some tokens and end this. And we did, we have a better program. I'm not buying this, the rally. I think that it can have, this software service rally can have a couple of days, but this is the couple of days.