Cramer's Morning Take: Alphabet 4/9/24

Jim Cramer (0:01)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting.

This is one of the wackier days I've seen, had a wacky Squawk on the Street, and that's in part because it's a better market, we have the yields okay, so you can be a little bit more upbeat CPI tomorrow. So we talked a lot about the Teen Survey, of which I don't think people understand. This is a 6,000 person survey from Piper that historically has predicted, is incredibly predictive of prices. And there are a lot of companies that we can talk about that have done very well, and some are not doing well. Otherwise, Starbucks is holding its own in the survey, Dutch Bros moving up, but if you were in Nike, you have to sell. I mean, that's clear what it says. Under Armour, you have to sell. So anyway, that's some of the things we talked about, but, and then we talked about the mega caps, and today is Alphabet Day.

Very significant day for Alphabet.

Jeff Marks (0:57)

It's having a good day. They announced a new ARM-based custom AI chip called Axion, likely made by Broadcom, and it follows Alphabet, Microsoft, Meta, Amazon. They're all making these own chips, their own chips.

Some of them made by Broadcom, some by Marvell.

Jim Cramer (1:15)

And ARM is in there. We know for ARM, Mark.

Jeff Marks (1:17)

Yeah, they're all ARM-based, but as a way just to reduce reliance on NVIDIA, AMD.

Jim Cramer (1:22)

NVIDIA's down because we're not talking enough about NVIDIA because these are companies that are trying to wean themselves off of NVIDIA. Now, they can't.

Jeff Marks (1:31)

Yeah, well, they need both. These custom chips are a little bit more specialized in their functions.

Jim Cramer (1:36)

Right, these are not CPU, GPU. They're CPU-based, but they are made specifically for Google.

And NVIDIA does not do that. NVIDIA makes very big supercomputers, of which, by the way, Google is based on. So, I mean, let's not...

Jeff Marks (1:51)

And this custom chip is for Broadcom. I think they said it's supposed to be 9 billion in revenues this year, up significantly from the year before.

Jim Cramer (1:59)

But you broke that story last week. You said point blank that this was happening.

You remember we had... Yeah, they had their AI day.

Jeff Marks (2:06)

They talked about they had an expansion with meta alphabet, but they also have a third customer as well. Many people think that's TikTok. But I think what's newer today, at least this is what JP Morgan's writing, is that these relationships are expanding and could sustain growth over the next couple of years for these custom chip businesses.

Jim Cramer (2:26)

It's very important because Broadcom has grown on the basis of buying companies and firing people. This is actually about a technological edge, so it's different from Broadcom. And one that I think is more sustainable and more secular and less cyclical. So I think that's very positive.

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SPEAKER_3 (2:57)

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