Jim Cramer Said “Demand for Cutting Edge AI Chips Keeps Accelerating” And That Is Good News For Broadcom (Nasdaq: AVGO)

Jim Cramer is a loud voice on Wall Street that’s tough to ignore, especially at a time like this, with Trump tariffs causing the most volatility that many beginning retail investors have never encountered. Indeed, historic win streaks don’t tend to be all too far behind those nasty losing streaks, as we found out just days after Trump’s Liberation Day tariffs sparked what seemed to be a global panic. Indeed, investors turned against tech stocks rather quickly, and it’s not surprising as to why.

Many of the high-tech names have hefty R&D budgets as they aim to capitalize on the AI boom, which could experience a slowdown in a stagflationary scenario that sees sluggish economic growth alongside persistent, rising inflation. Additionally, the hefty valuation metrics to be had on some of the high-tech high-flyers seemed overdue for a bit of a healthy correction. Of course, few would have thought that it’d be much higher-than-expected tariffs that would have pushed tech stocks off a cliff.

In any case, the selling frenzy tested Jim Cramer’s bullishness about the Magnificent Seven stocks. He referred to the names at “ground zero” for losses. And while the “hideous” and “depressing” decline in the top tech names has challenged his optimism, he’s advised against extreme actions such as panic selling. Despite such comments in the face of the tariff-fueled volatility storm, he’s keeping close watch on demand for all things AI. Thus far, it seems like demand isn’t just holding up, but booming.

A bit of trimming and rotation in the face of a market bloodbath isn’t a bad thing, but dumping entire positions in tech titans seems ill-advised, especially in the face of an earnings season that could spark a 180-degree shift in investor emotions, as investor attention shifts from tariffs back to AI.

Tech stocks are showing signs of life (and turnaround potential) this week.

Just as tech and AI stocks led us lower in the correction, they could lead us higher out of this nasty decline. And that’s just what we saw this week, as the tech-heavy Nasdaq 100 led the charge higher, thanks in part to good numbers from a number of AI-driven firms, including Alphabet (NASDAQ:GOOG) and ServiceNow (NASDAQ:NOW). Indeed, earnings do matter, and they may set the next course for the markets as Trump heads into deal-making mode with a number of nations, including China.

Perhaps the most striking thing Cramer said amid the carnage comes in the form of an X (formerly Twitter) post: noting that “demand for cutting-edge AI chips keeps accelerating.” He’s absolutely right, with Amazon (NASDAQ:AMZN) and Nvidia (NASDAQ:NVDA) recently stating that AI data center demand is also rising.

As the next wave of tech earnings trickle, perhaps investors may wish to do some dip-buying in the previously heated names that have since come in a great deal, either due to a lack of AI news, tariff talks, or both.

Broadcom stock could be a “top pick” for investors seeking to play AI chips into earnings.

Broadcom (NASDAQ:AVGO) is one of the names that’s now given back all of the stratospheric gains it enjoyed back in December when it pulled the curtain on a blowout quarter. Arguably, that quarter is coming “for free,” even after the latest 6.4% relief surge on Thursday. For investors looking to capitalize on the next phase of the AI chip boom, Broadcom seems like an opportunistic bet, given its role in enabling tech giants to design their own custom silicon (ASICs).

Despite the chaotic selling, JP Morgan recently stepped up, citing Broadcom as one of its top picks going into earnings. Of course, Trump tariffs could pave the way for further turbulence, but the “secular trends” may be tough to stop as AI chip and cloud demand continue moving forward at full speed.

At the time of this writing, shares of AVGO also look cheap at 27.1 times forward price-to-earnings (P/E). Given the impressive early tech quarters we’ve seen thus far, I think it’s a mistake to count out the former market darling as it looks to power its way into the Magnificent Seven.

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