Chip Stock: Bullish Despite 30% Pullback

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## AI Spending Concerns Dent Tech Sector, Apple Briefly Reclaims Crown as Market Cap Leader

**New York, NY** – The technology sector faced renewed headwinds on Friday as concerns surrounding the trajectory of artificial intelligence (AI) spending cast a shadow over chipmakers, extending a week-long downturn in the semiconductor industry. The VanEck Semiconductor ETF (SMH) flirted with bear market territory in early trading, shedding 20% from its recent peak, before staging a partial recovery as bargain hunters emerged.

Portfolio Director Jeff Marks attributed the pullback to a combination of forced selling and profit-taking, emphasizing that the fundamental AI narrative remains robust. He highlighted the Investing Club’s strategic moves to trim its position in Corning (GLW) and exit its stake in Arm Holdings (ARM) as instrumental in mitigating the impact of this sector-wide correction. These actions have also freed up valuable capital, positioning the portfolio to capitalize on emerging opportunities.

In a significant development, Apple (AAPL) briefly surpassed Nvidia (NVDA) to reclaim its position as the world’s most valuable company. The surge followed an upgrade from HSBC, which initiated coverage with a “Buy” rating and a price target of $366, a substantial increase from its previous $260 assessment. HSBC’s analysts believe Apple’s newly unveiled Apple Intelligence platform, coupled with upcoming AI features and product launches, could ignite a significant upgrade cycle. Crucially, their report suggests Apple is well-positioned to benefit from the AI boom without the immense capital expenditure burden faced by hyperscalers, largely due to its strategic partnership with Alphabet (GOOGL).

Marks further elaborated on Apple’s catalysts, pointing to the approval of Apple Intelligence features in China as a key driver. This expansion unlocks access to functionalities that are expected to incentivize consumers to upgrade to the latest iPhone models. While Marks remains optimistic about Apple’s long-term prospects, he acknowledged that the recent upgrade arrived after a period of aggressive gains for the stock, reaching a record high on Friday, suggesting the call might be somewhat belated.

Looking ahead, the Investing Club is keenly awaiting Intel’s (INTC) earnings report next week. The focus will be on sustained strength in its CPU business and continued advancements in its foundry operations. Despite a more than 30% decline in Intel shares this month, driven by a broader rotation out of semiconductor stocks, the Club maintains a steadfast bullish stance. Jim Cramer has consistently championed Intel as his favorite stock and continues to view current price levels as an attractive entry point for incremental acquisitions.

In a rapid-fire segment at the conclusion of Friday’s session, the Investing Club also discussed other key holdings, including Capital One (COF), GE Vernova (GEV), and Honeywell (HON).

*The CNBC Investing Club with Jim Cramer is long AAPL, ARM, GLW, INTC, NVDA, and Q.*

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