Jim Cramer told CNBC viewers that Wall Street is fleeing AI stocks for safety, moving into names like Coca-Cola and Walmart. The shift comes as Alphabet's stock fell nearly 7% after the company raised its 2026 capital spending guidance to $195-205 billion from $180-190 billion, pushing its quarterly free cash flow negative.
The Dot-Com Comparison
Cramer said he raised the comparison to the dot-com unwind in 2000 to flag a resemblance, not to forecast a crash. He remains bullish on Nvidia and Intel, arguing durable demand supports both stocks. But the broader rotation is real: institutions are selling AI winners and buying companies with growth drivers away from the data center, he explained.
Memory Chip Stocks Reverse Course
Memory chip stocks — SK Hynix, Micron, Western Digital, SanDisk — surged through much of 2026 due to AI data center demand, but those gains have reversed sharply. South Korea's KOSPI sank more than 10% this week, with SK Hynix and Samsung dropping alongside US peers. The sell-off underscores how tightly the AI trade has tied global markets together.
Defensive Stocks Rally
Coca-Cola, PepsiCo, and Walmart rallied while the Nasdaq Composite lagged. Hedge fund manager Steve Eisman has flagged the divergence and warns the market now trades as a single AI bet. That concentration risk is exactly what Cramer says investors are trying to hedge by rotating into consumer staples and retail.
Seagate beat earnings estimates after Tuesday's close, offering a bright spot in the storage sector. But all eyes are on the Federal Reserve, which announces its rate decision today. The outcome could either accelerate the rotation or pull money back into tech if the central bank signals a dovish path.
