Wall Street has spent the past week debating who the biggest winners and losers of the artificial intelligence boom will ultimately be. Memory chip maker Micron’s big profits have reinforced a ferocious demand for computing resources, but investors have also begun to question whether building AI is becoming too expensive to fund hyperscalers. The tech-heavy Nasdaq Composite Index fell 4.6% for the week, while the S&P 500 Index fell 1.95%. The Dow Jones Industrial Average bucked the trend, rising 0.6% as lower oil prices benefited economically sensitive stocks and a shift away from AI boosted health care stocks. Let’s take a closer look at the factors that moved the market this week. Micron Rekindles AI Trading – 1st Semiconductor stocks came under pressure on Tuesday after a sharp drop in South Korea’s Kospi Index rippled through Wall Street. Shares of South Korean memory giants Samsung and SK Hynix plunged overnight, sending AI stocks lower on Wall Street and raising concerns that the chip trade may have finally gone too far, too fast. Micron fell about 13% on Tuesday alone, while the Nasdaq Composite fell 2.2%. Those concerns were allayed Wednesday night when Micron released its financial results. The company had a blockbuster quarter, with sales more than quadrupling from a year earlier, and the company released guidance for the quarter that far exceeded Wall Street expectations. Micron also announced 16 long-term supply deals across data center operators, automakers and other customers, giving investors more confidence that memory upcycling will take years. In response, Micron soared 16% on Thursday, lifting its peers across the memory and storage conglomerate. This includes chipmakers SanDisk and Western Digital, as well as companies that make the equipment used to make chips, such as Applied Materials and Lam Research. This report confirms one of Jim Cramer’s biggest themes in this market. The idea is that AI companies facing product shortages continue to benefit from abnormal demand and pricing power, boosting profits. That excitement spilled over to clubs that own Corning, where fiber-optic products are becoming increasingly important for AI data centers. As the stock price rose to an all-time high on Thursday, we pared back some of our position and locked in a profit of approximately 160% on the shares we purchased in October 2025. For reasons I can’t fully explain, the stock also did well on Wednesday. While we remain bullish on Corning’s long-term prospects, our discipline is to take some profits when we believe the stock’s price appreciation outweighs current fundamentals. The enthusiasm for many semiconductor stocks didn’t last long. A basket of chip stocks fell more than 5% on Friday after reports that OpenAI is considering delaying its initial public offering until next year, raising new questions about the sustainability of funding for the AI infrastructure boom. Investors feared that if one of the market’s most anticipated IPOs was postponed, it would be difficult for AI companies to finance their big spending plans. Micron fell 6.7% on Friday and ended the week down 0.15%. This sums up this week’s volatility. Broad semiconductor trade further deteriorated, with club-name names Nvidia, Broadcom, Intel and Arm ending the week down 8.6%, 12.3%, 4.2% and 23.9%, respectively. Hyperscalers hit a brick wall If Micron’s profits showed who’s winning in the AI boom, Apple highlighted who’s paying for it. Shares of the iPhone maker fell 6.1% on Thursday after the company announced price hikes for some MacBook and iPad models, citing rising memory and storage costs. This is Apple’s first formal move to pass on rising component prices to consumers. It comes after CEO Tim Cook last week admitted the company could no longer absorb price increases. Apple wasn’t alone. All members of the Magnificent Seven ended the week in the red as investors continued to shy away from companies funding AI construction or supplying it. That’s exactly what Jim argued in his Sunday column. Hyperscalers are running into hardware bottlenecks. Amazon, Alphabet, Microsoft, and Meta have the financial wherewithal to continue investing aggressively in artificial intelligence, but surging demand has created supply shortages and sharply increased costs for inputs such as memory. Earlier this year, Microsoft and Meta cited rising component costs as a contributing factor to the expansion of AI capital spending, but Apple’s price increases showed that even the world’s most valuable consumer electronics companies are not immune. Meanwhile, companies that supply these critical components have been the biggest market winners. For now, Jim believes investors are better off owning suppliers than buyers, but because of the long-term investment horizon, names cannot be bought or sold. Nevertheless, until the supply-demand imbalance is resolved, the companies selling the picks and shovels of the AI boom appear to be in a better position than those writing the checks. Low oil prices support inflation conditions While technology struggles, falling oil prices have boosted some cyclical stocks. Oil markets remained largely undaunted after President Donald Trump on Friday accused Iran of violating the cease-fire agreement by firing attack drones at commercial ships in the Strait of Hormuz. U.S. standard crude West Texas Intermediate crude ended Friday at about $69 a barrel, while international standard Brent crude hovered around $72, erasing nearly all of the gains caused by the conflict earlier this year. Traders last week noted signs that tanker traffic was returning to the vital shipping route for global energy and chemicals supplies. Indeed, after the market closed on Friday, there was a ripple effect when it was revealed that the US military had carried out an attack on Iran in response to “an unwarranted attack on commercial shipping by the Iranian military.” It remains to be seen how the market will digest this news over the coming week. But for at least the past week, falling oil prices have eased inflation concerns, lowered U.S. Treasury yields and eased concerns that the Federal Reserve would have to raise rates multiple times this year. This led to gains in sectors sensitive to economic growth, such as industrial stocks, financial stocks, and transportation stocks. The Dow Jones Industrial Average rose modestly for the week, even as the tech-heavy Nasdaq remained under pressure with gains in Sherwin-Williams, Caterpillar and Home Depot. Health care stocks such as Johnson & Johnson and UnitedHealth also led the blue-chip index. J&J ended Friday at a record closing price, as did two other health care stocks: Eli Lilly and Cardinal Health. The oil backdrop made FedEx and FedEx Freight’s earnings particularly important last week. Both companies spend a lot of money on fuel and have introduced surcharges to compensate for recent price increases. A slowdown in economic activity due to energy shortages is a risk for them. FedEx was initially sold off Tuesday night after releasing guidance that some deemed disappointing, but we think investors missed the bigger news amidst the noise in the headlines. The company beat Wall Street expectations for both sales and profits, but executives pointed to continued momentum in high-margin businesses such as healthcare, aerospace, automotive, and AI-related data center logistics. We took advantage of the post-earnings weakness to build positions in Wednesday’s trading. FedEx Freight, which recently spun off into a separate company, reported on Thursday night. While there were few surprises in the quarter itself, management was upbeat about the freight market, saying demand was starting to stabilize after several years of weakness. The post-earnings stock price decline created an opportunity to buy additional FedEx Freight stock. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
