TLDR
- Jim Cramer staying loyal to Magnificent Seven tech stocks through early 2026 downturn
- Storage companies benefiting from AI memory chip shortage while big tech lags behind
- Micron stock doubled in three months, up 39% year-to-date on pricing power
- Market rotation moving investor money from Mag 7 into storage sector plays
- Cramer forecasts eventual return to Amazon, Microsoft, Nvidia when storage peaks
Jim Cramer isn’t backing away from Magnificent Seven stocks. The CNBC host shared his investment strategy Thursday as most of these tech companies post lackluster 2026 returns.
The group includes Amazon, Alphabet, Apple, Microsoft, Meta Platforms, Nvidia, and Tesla. Broadcom frequently gets counted as part of this elite tech circle. Only two stocks show positive results so far this year.
Cramer defended his position based on company fundamentals. These firms have strong balance sheets and experienced leadership teams. Their financial resources give them multiple paths to growth.
The Mad Money host sees temporary headwinds rather than permanent problems. He expects market dynamics to favor these companies again soon.
AI Chip Shortage Powers Storage Sector Gains
Storage and semiconductor equipment stocks are experiencing strong rallies. This performance explains much of the weakness in Magnificent Seven companies.
Memory chips essential for AI computing face severe shortages. Micron capitalized on this situation with 39% gains year-to-date. The stock doubled over the past three months alone.
Seagate, Sandisk, and Western Digital posted similar gains. Supply constraints allow these companies to raise prices repeatedly. Customers have few options when buying storage solutions.
“Now we are in this bizarre, never-before-seen moment where the storage companies just keep raising price over and over again,” Cramer explained. Resistance remains minimal because AI operations require storage capacity.
Cramer described the situation as sector rotation. Money flows out of Mag 7 stocks and into storage plays. “These stocks have become share donors to the market capitalization of these storage companies,” he said.
The host used an analogy to illustrate customer helplessness. Companies must buy storage like drivers must buy gasoline. Price becomes irrelevant when alternatives don’t exist.
Big Tech Rebound Coming Says Cramer
Cramer believes current storage pricing can’t continue indefinitely. Supply issues eventually get resolved through increased production. Storage stocks will lose their advantage when that happens.
The CNBC host expects capital to flow back into Magnificent Seven stocks. These companies remain central to AI development and adoption. Their leadership positions in technology haven’t changed during the storage rally.
He urged investors to keep their big tech holdings. “I’m sticking with the Mag 7,” Cramer declared on his show. Selling now could mean missing gains when the rotation reverses.
Cramer highlighted the management quality at these companies. Smart executives can navigate challenging market conditions. They have tools and resources to respond to changing technology landscapes and competitive pressures effectively.
The host sees the present moment as a temporary market shift. Storage attracts capital now but big tech built lasting advantages. Their diverse operations and innovation capabilities position them for long-term success beyond current sector trends.
