Tech Sector Divergence: Cybersecurity Slump Amid Memory Chip Rally

Every weekday, the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here is a recap of Thursday’s key market moments.

1. Stocks fell on Thursday as higher oil prices and bond yields pressured the market. West Texas Intermediate crude jumped after the Trump administration discussed stepping up economic measures against Iran. The yields on the 10-year and 30-year Treasurys wiped out most of Wednesday’s declines following the Treasury’s announcement of a significant increase in bond repurchases. “We have oil and rates higher. That’s complicating the picture,” Club portfolio director Jeff Marks said during the Morning Meeting. The nearly 10% drop in Walmart stock following the retailer’s lackluster earnings report also weighed on the S&P 500, fueling concerns about consumer health. “That has the market worried about the health of the consumer,” Jeff added.

2. Micron gained over 2% amid broader strength in the memory sector. Investors welcomed reports that Samsung, one of the world’s largest memory manufacturers, is set to announce a shareholder return policy worth over $72 billion. This follows SK Hynix’s plans to buy back $29 billion of stock. All three companies are flush with cash on the back of the AI-driven chip supercycle. Jim Cramer’s interview with Micron CEO Sanjay Mehrotra from the company’s new research center in Boise, Idaho, airs later on “Mad Money.”

3. CrowdStrike lost over 4% on news that CTO Elia Zaitsev is leaving the company to launch an AI-focused venture fund. Club portfolio director Jeff Marks advised not to worry about the selling, calling it “a lot of noise.” Shares of another cybersecurity holding, Palo Alto Networks, dropped more than 2%. Marks reminded investors that both stocks have enjoyed strong rallies this summer, with significant profits already booked earlier this month. CrowdStrike is scheduled to release its earnings next week, while Palo Alto’s quarterly results are due on Sept. 1. Solid reports are expected from both. “The stories here are so strong, especially as enterprises worry about growing cybersecurity risks from a lot of these newer models,” Jeff said.

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