Yesterday felt like someone yanked the plug on the AI party.
Oracle dropped a quarterly report that missed the whisper number on cloud growth, and suddenly every stock even remotely connected to artificial intelligence got taken out back and shot. The Nasdaq bled, growth names cratered, and the phrase “AI bubble” started trending again. Been there, seen that movie before.
But here’s the thing — not every reaction in the market makes sense when you zoom in. And that’s exactly what Jim Cramer was hammering home in Thursday morning’s Investing Club meeting. While the crowd panics, he’s calmly separating the real damage from noise.
When the Market Overreacts, Smart Money Steps In
I’ve followed these moments for years, and the ones where one big name stumbles and the entire theme gets painted with the same brush. Remember when Meta had its “metaverse disaster” quarter and every social media stock got crushed for months? Or when Tesla missed deliveries and suddenly lithium miners were dead money?
Oracle’s report wasn’t catastrophic — revenue still grew double-digits, they signed new AI deals — but the guidance on cloud infrastructure spend came in lighter than the most bullish forecasts. Wall Street being Wall Street, that was enough to trigger a mini-panic.
Yet two stocks Cramer cares deeply about — GE Vernova and Broadcom — got caught in the crossfire. And his take? This pullback is mostly nonsense.
GE Vernova: The Pullback I’ve Been Waiting For
Let’s start with GE Vernova, the pure-play power equipment spin-off that’s become the poster child for “AI needs electricity.”
The stock ran from about $260 in early October to $725 yesterday — that’s 180% in ten weeks. Parabolic doesn’t even begin to describe it. On Wednesday they gave guidance through 2028 that was frankly stunning: mid-teens revenue growth, margin expansion into the high-teens, free cash flow exploding. The street raised price targets across the board (we moved ours to $800).
Then Oracle reports, and GE Vernova opens down almost 7% pre-market, closes down nearly 5%. Really?
“That’s really why we always say never chase a parabolic move.”
– Jeff Marks, CNBC Investing Club portfolio analyst
Jeff’s point hits home. The stock needed to breathe. Oracle’s cloud miss doesn’t suddenly make data centers run on hopes and dreams. Microsoft, Google, Amazon — they’re all still building hyperscale facilities at a ridiculous pace. And those facilities need natural-gas turbines for reliable power while the grid catches up.
GE Vernova has basically no competition in the Western world for the newest H-class turbines. Orders are backlog out years. In my view, this dip is the best entry point we’ve seen since the spin-off.
- Oracle’s cloud spend slowdown? Mostly tied to their own Gen2 cloud, not the broader ecosystem.
- Data center power demand forecasts keep getting revised higher, not lower.
- GE Vernova’s 2028 guidance assumes zero acceleration in AI build-out — meaning upside if the trend continues.
Cramer’s exact words Thursday morning: “The stock is a good buy after this pullback.” I’m inclined to agree.
Broadcom: Don’t Confuse It With Oracle
Broadcom reports after the bell tonight, and the stock is down 3-4% heading into the print. Again, because… Oracle?
Look, I get the surface-level connection — both sell into hyperscalers, both have big AI exposure. But the businesses are night and day.
Broadcom’s AI revenue is almost entirely custom ASICs (the tensor processing units they design for Google, Meta, ByteDance, etc.) plus networking chips that glue the data center together. Oracle barely competes in custom silicon. Their miss on standardized cloud instances doesn’t tell us much about demand for proprietary AI accelerators.
The street expects another beat-and-raise tonight. More importantly, investors want to hear:
- How quickly the new $10B+ annual AI run-rate ramps in 2025
- Whether Meta and Apple are becoming bigger custom-chip customers
- Update on VMware integration and the return of software growth
Cramer’s take was refreshingly blunt:
“If you want to sell it because it’s up big, that makes sense to me. But if you’re selling because of Oracle, that’s a little nonsensical.”
He’s right. Broadcom has gained 60% in six months. Taking some profit into strength is perfectly reasonable. Dumping it because Oracle’s rental-server business grew 40% instead of 50% feels like throwing the baby out with the bathwater.
The Bigger Picture: Rates Trump Everything
While everyone fixates on Oracle, the Federal Reserve just cut rates another 25 basis points — the third cut in this cycle. History says that’s rocket fuel for the exact kind of long-duration growth stocks that got hammered yesterday.
Cramer’s broader message Thursday: “You just got a very good chance to buy. It can continue today if you isolate the ones that do better when rates go down.”
He specifically flagged names like Home Depot (lower mortgage rates → more home sales → more renovations), but the same logic applies to profitable, cash-gushing tech leaders. Present-value math gets a lot friendlier when the discount rate falls.
So What Should You Actually Do?
Here’s my personal playbook based on everything discussed:
- GE Vernova – Start a position or add on this 5-10% weakness. The story is intact, possibly stronger.
- Broadcom – If you’re overweight after the monster run, trim into tonight’s report. If you’re underweight, wait for the print — a beat could send it right back to all-time highs.
- General AI theme – Use pullbacks in the leaders (Nvidia, Broadcom, the hyperscalers) as opportunities, not reasons to abandon ship.
Markets love to overreact. Oracle gave them an excuse yesterday. The smart move is to tune out the noise and focus on the fundamentals that actually matter — power demand, custom silicon ramps, and a Fed that’s now clearly in easing mode.
In my experience, the best investing mistakes I regret most are the ones where I let a single headline scare me out of a great long-term story.
Yesterday’s sell-off in AI-adjacent names? Probably going to look like one of those moments in six months.
Stay disciplined out there.
