AI Trade Slumps Again as Kospi Plunges, CoreWeave and TSMC Slide

Cramer said inflation was still running hot, with the morning's wholesale producer price index coming in well above expectations. He also said geopolitical problems in the Middle East and the Russia-Ukraine war had not abated.

South Korea's Kospi remained the center of AI hardware problems, according to Cramer. SK Hynix fell another 6% in U.S. premarket trading after the South Korean memory giant closed the previous day back below its $149 July initial public offering price, he wrote. He described the overnight Kospi moves as the tail wagging the U.S. artificial intelligence trade.

CoreWeave shares continued to deteriorate, down roughly 4% in the morning after a nearly 15.5% decline the previous day, Cramer wrote. CoreWeave's bonds were also selling off, pushing yields higher, in what he called the nexus of bond and financing cost fears. The stock was approaching its Situational Awareness blow-up lows of just above $60 in late July. Deutsche Bank said buy the dip, while Bernstein doubled down on its sell call, according to Cramer.

Anthropic disclosed a roughly 45% sequential increase in third-quarter revenue to $16.8 billion, according to CNBC sources. Cramer called the growth healthy but much slower than the 146% revenue gain from the first quarter to the second. The Wall Street Journal reported that some investors expect Anthropic to hit an annualized revenue rate north of $100 billion by year-end, he added.

Taiwan Semiconductor Manufacturing Co. saw no end in sight for chip demand and posted a sixth straight quarter of record net profit with strong guidance, Cramer wrote. But in the anti-AI market, he said, the results may not have been strong enough. Shares of the world's largest chip fabricator were down in the morning after declines in six of the past seven sessions.

Microsoft was 'loved again' along with many other software stocks, Cramer wrote. UBS raised its price target on the stock to $675 from $525. Expectations were rising for Microsoft's Azure cloud unit and M365 software suite into earnings, but analysts said they still expected the company to clear these higher bars. Cramer said there were investing lessons from Microsoft's road back to its first record close in almost a year.

Bank of New York beat on the top and bottom lines, sending shares up almost 2% premarket, according to Cramer. He wrote that bank earnings had received a chilly reception this week even when results were good. BNY's numbers looked better than rival State Street's, with both net interest income and fee revenue topping consensus. A conference call was scheduled for 11 a.m. ET.

Penske Automotive Group agreed to be taken private by its two biggest shareholders, Penske Corp and Mitsui, at an enterprise valuation of $16.3 billion. Cramer noted that Wells Fargo was one of the financial advisors on the deal. He wrote that CEO Charlie Scharf has been building up Wells Fargo's investment banking business, a strategy he likes for an Investing Club holding, and that the Club upgraded its rating on Wells Fargo after earnings Tuesday.

Mizuho Securities cut its price target on Honeywell Technologies to $255 from $265 ahead of earnings while keeping a buy rating, Cramer wrote. He said the Investing Club had owned the stock for years but decided the previous day to sell the rest of its stake, after cutting it in half last month.

Editor's Summary

AI-related stocks faced another session of selling pressure as Kospi weakness, SK Hynix and CoreWeave declines, and hot producer inflation weighed on sentiment. The same day brought a record profit from TSMC, a revenue update from Anthropic, a Bank of New York earnings beat, and a $16.3 billion take-private deal for Penske Automotive. Cramer used the list to flag splits among analysts on CoreWeave and to say his Investing Club had exited Honeywell.