Cramer urges investors to look outside tech as AI stocks get choppy

CNBC’s Jim Cramer said Monday that investors with heavy tech exposure should consider putting new money into other parts of the market while artificial intelligence stocks remain volatile. For everyday investors, the point is diversification: a hot theme can still be risky when price swings get sharp and the story changes quickly.

Cramer, host of CNBC’s Mad Money, said the AI trade has become too unpredictable for aggressive buying right now. The “AI trade” refers to stocks investors have bid up because they are tied to artificial intelligence, including chipmakers, data center suppliers and companies expected to benefit from AI spending.

“If you own too much tech, you’re going to be slaughtered, and you won’t even know what hit you,” Cramer said on CNBC. “For the moment, it’s time to go to other sectors. They can make you money, without the volatility.”

His comments come after semiconductor and AI-related shares pulled back in recent weeks, following record-setting moves earlier in the year, according to CNBC. Cramer argued that investors do not need to chase every move in AI-linked stocks while the group is under pressure.

Where Cramer says he is looking instead

Cramer pointed to companies outside technology that he views as higher-quality alternatives while waiting for a better setup in tech. He named Goldman Sachs, Wells Fargo, FedEx, FedEx Freight, Honeywell and Boeing as examples, CNBC reported.

Cramer’s Charitable Trust, the portfolio used by the CNBC Investing Club, owns all six of those companies, according to CNBC. That matters because Cramer is speaking about stocks connected to a portfolio he oversees, not just making a general market observation.

The idea he laid out is plain: if one area of the market is swinging hard, investors may be able to find opportunities in sectors where earnings, balance sheets or business momentum are less tied to the current AI debate. Cramer did not say he was leaving AI behind altogether.

Nvidia and Intel remain on his long-term list

Cramer said he remains bullish on Nvidia, which is held by the CNBC Investing Club. He said Nvidia still has a central position in data centers, the facilities that house servers used to run cloud computing and AI workloads.

He said Nvidia’s AI server racks are “the envy of the world,” adding that only AMD comes close, according to CNBC. He also said Nvidia remains dominant even as some customers try to design their own chips.

Cramer also repeated his positive view on Intel before the company’s earnings report. He described Intel as a “triple play” because of its central processing unit business, advanced chip-packaging work and developing third-party foundry business, CNBC reported. A foundry manufactures chips for outside customers, while chip packaging connects different chip components so they can work together efficiently.

“Intel is a national treasure,” Cramer said, according to CNBC. The CNBC Investing Club also owns Intel.

For now, Cramer said he wants to see a broader tech selloff before adding significantly to the sector. Until then, his stated preference is to focus on non-tech companies he considers high quality while waiting for more attractive prices in AI-linked stocks.

This story draws on original reporting from CNBC.