Cramer's Morning Take: Don't Fight the Fed & AI Demand 3/21/24

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 those things where you and I in the club are at cross purposes with what the media is saying.

The media is saying that because the Fed is maybe still cut two or three times, that therefore stocks are good. You and I both know that what this does is make it so we're not fighting the Fed, but makes it even more important that we analyze earnings. It doesn't do any good to do Fed speak. That has cost a lot of people a lot of money. As people sit on the sidelines waiting for the Fed to do something, what we do is plunge right in. We get in, we get our hands dirty with stocks like Nvidia, with stocks like Broadcom, and yes, we'll be talking about Apple in a moment. But I think when you don't fight the Fed, Jeff, it's a good situation.

Jeff Marks (0:50)

No, absolutely. And if you focus on the big earnings report last night and what is central to the biggest theme driving the market right now, AI, you heard really good things from Micron.

We'll talk about them more in the rapid fire. But the big thing is that for this year, supply to be below demand for DRAM and NAND, that means their margins are going to improve. A lot of that is due to AI server demand, driving this rapid growth for their high bandwidth memory. 2024 is already spoken for, Jim, and 2025, they're saying it's on allocation.

Jim Cramer (1:22)

Yeah, I was kind of shocked reading the transcript, and you get everything's good, the server's good, PC's good, there's obviously troughing, the quarter ahead on a lot of these different NAND, regular products that they've had for years. And then suddenly you get to where they're talking about the high bandwidth memory that goes in to, say, someone who buys Blackwell. Dell would go buy it, for instance, put it together.

And you realize, oh my, I've never heard Sandre Moroja ever say anything like this, that they literally are spoken for for 2025 And by the way, the gross margins on these chips are three times of the regular chip. So Micron deserves to be up. And I've got to tell you, frankly, like when Dell had its step function move, people are beginning to realize, Jeff, that there's a lot of money going to be made in 2024 and 25, not 2027, 2028, with things that are related to generative AI and accelerated computing.

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SPEAKER_3 (2:31)

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