The AI trade cooled and oil sank. A closer look at Wall Street’s volatile week
Wall Street spent the week debating who the biggest winners and losers of the artificial intelligence boom will ultimately be. Memory chipmaker Micron’s blockbuster earnings reinforced the fervent demand for computing resources, but it also led investors to question whether the AI buildout is becoming too expensive for the hyperscalers funding it. The tech-heavy Nasdaq Composite fell 4.6% for the week, while the S & P 500 slipped 1.95%. The Dow Jones Industrial Average bucked the trend, edging up 0.6%, as lower oil prices benefited economically sensitive names and a rotation away from AI lifted healthcare stocks. Here’s a closer look at what drove the market this week. Micron reignites the AI trade — for a day Semiconductor stocks came under pressure on Tuesday after a brutal sell-off in South Korea’s Kospi Index spilled over to Wall Street. Shares of Korean memory giants Samsung and SK Hynix plunged overnight, dragging AI stocks on Wall Street lower and fueling concerns that the chip trade had finally run too far, too fast. Micron fell roughly 13% on Tuesday alone, while the Nasdaq Composite dropped 2.2%. Those fears eased Wednesday evening when Micron reported earnings. The company delivered a blockbuster quarter , more than quadrupling revenue from a year ago and issuing guidance for the current quarter well above Wall Street’s expectations. Micron also announced 16 long-term supply agreements spanning data center operators, automakers and other customers, giving investors greater confidence that the memory upcycle has years to run. In response, Micron soared 16% Thursday, lifting peers across the memory-and-storage complex. That includes chipmakers SanDisk and Western Digital , as well as companies that make equipment used to build chips, such as Applied Materials and Lam Research . The report reinforced one of Jim Cramer’s biggest themes in this market : AI-related companies with product shortages continue to benefit from extraordinary demand and pricing power, boosting profits. The excitement spilled over to Club holding Corning , whose fiber-optic products have become increasingly critical to AI data centers. Shares climbed to fresh record highs Thursday, prompting us to trim a small portion of our position and lock in a gain of roughly 160% on shares purchased in October 2025. The stock also had a strong day Wednesday for reasons we couldn’t fully explain . We remain bullish on Corning’s long-term prospects, but our discipline is to take some profits when a stock’s advance seems to outrun its current fundamentals. The enthusiasm for many chip stocks didn’t last. A basket of chip stocks fell over 5% Friday after reports that OpenAI is considering delaying its initial public offering until next year raised fresh questions about the durability of funding for the AI infrastructure boom. Investors worried that pushing back one of the market’s most anticipated IPOs could make it harder for AI companies to fund their massive spending plans. Micron fell 6.7% Friday and ultimately finished the week down 0.15% — encapsulating the week’s volatility. The broader semiconductor trade fared even worse, with Club names Nvidia , Broadcom , Intel , and Arm ending the week down 8.6%, 12.3%, 4.2% and 23.9%, respectively. The hyperscalers run into a brick wall If Micron’s earnings showed who is winning from the AI boom , Apple highlighted who is paying for it. Shares of the iPhone maker sank 6.1% Thursday after the company announced price increases across several MacBook and iPad models, citing soaring memory and storage costs. It marked Apple’s first formal move to pass higher component prices on to consumers after CEO Tim Cook acknowledged last week that the company could no longer absorb the increases . Apple wasn’t alone. Every member of the ” Magnificent Seven ” finished the week in the red as investors continued to shy away away from the companies funding the AI buildout and toward the businesses supplying it. That’s exactly what Jim argued in his Sunday column : the hyperscalers have run into a hardware bottleneck. Amazon , Alphabet , Microsoft and Meta have the financial resources to continue investing aggressively in artificial intelligence, but the surge in demand has created supply shortages that are driving the cost of inputs like memory sharply higher. Earlier this year, Microsoft and Meta both cited rising component costs as contributing to their ballooning AI capital expenditures, while Apple’s price hikes showed even the world’s most valuable consumer electronics company isn’t immune. Meanwhile, the companies supplying those critical components have become some of the market’s biggest winners. For now, Jim thinks investors are better off owning the suppliers than the buyers — though our long-term investment horizon keeps us from trading in and out of names. Nevertheless, until supply and demand become less imbalanced, the companies selling the picks and shovels of the AI boom appear better positioned than the companies writing the checks. Falling oil helps inflation picture While technology struggled, falling oil prices gave some economically sensitive stocks a boost. Even after President Donald Trump accused Iran on Friday of violating the ceasefire agreement by launching attack drones at commercial vessels in the Strait of Hormuz, the oil market barely flinched. U.S. standard West Texas Intermediate crude ended Friday at roughly $69 a barrel, while international benchmark Brent hovered around $72, erasing nearly all of the gains sparked by the conflict earlier this year. Traders last week instead focused on signs that tanker traffic was returning to the vital shipping route for global energy and chemical supplies. To be sure, a wrinkle arrived after the market closed Friday, with the U.S. military disclosing it conducted strikes against Iran in response to the “unwarranted aggression against commercial shipping by Iranian forces.” It remains to be seen how the market will digest that news in the week ahead. But last week, at least, declining oil prices helped ease inflation concerns, pushing Treasury yields lower and reducing fears that the Federal Reserve will need to raise interest rates multiple times later this year. That gave sectors sensitive to economic growth — including industrials, financials, and transportation stocks — a lift. Gains in Sherwin-Williams , Caterpillar and Home Depot , helped the Dow Jones Industrial Average cling to a modest weekly gain even as the tech-heavy Nasdaq remained under pressure. Healthcare stocks like Club name Johnson & Johnson and UnitedHealth were another source of strength for the blue-chip index. J & J ended Friday at a record close, as did our two other healthcare stocks in Eli Lilly and Cardinal Health . The oil backdrop made last week’s earnings from FedEx and FedEx Freight particularly important because both companies spend a lot of money on fuel and had implemented surcharges to cover the recent spike. Slowing economic activity tied to the energy crunch is a risk for them. On Tuesday night, FedEx initially sold off after issuing what some viewed as disappointing guidance, but we believe investors missed the bigger story within a noisy print. The company topped Wall Street’s expectations on both revenue and earnings, while management pointed to continued momentum in higher-margin businesses such as healthcare, aerospace, automotive and AI-related data center logistics. We took advantage of the post-earnings weakness to build up our position in Wednesday’s session. The recently spun off FedEx Freight reported on Thursday night. While the quarter itself contained few surprises, management struck an encouraging tone on the freight market, saying demand is beginning to stabilize after a multiyear downturn. The stock’s pullback following earnings created an opportunity for us to buy some additional shares of FedEx Freight. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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