Jim Cramer wants to buy this stock now 10% below its highs. Here's why

U.S. stocks rallied Thursday, with the Dow reclaiming 50,000 after the U.S.-China meeting and Cisco’s blowout earnings, while AI enthusiasm around Cerebras appeared to support select semis and AI names. Cybersecurity stocks Palo Alto Networks and CrowdStrike hit fresh all-time highs after Palo Alto said AI models are helping it detect and fix vulnerabilities, reinforcing the bullish case for the group. Jim Cramer also flagged TJX as a potential buy after the stock fell about 10% from April highs ahead of earnings next week.

Analysis

The near-term winner set is shifting from pure AI beta into monetization and protection layers. Cisco’s upside matters less as a one-day index boost and more as evidence that enterprise budgets are still clearing for infrastructure tied to AI deployment, while the relative weakness in some semis looks like a positioning rotation rather than a fundamental demand break. That creates a second-order read-through: capital is likely being recycled from “AI picks and shovels” with crowded ownership into names with clearer cash conversion and less binary valuation risk.

Cybersecurity looks increasingly like a structural duration trade, not a tactical bounce. If AI lowers the cost of attack faster than it lowers the cost of defense, spending shifts toward higher-frequency detection, endpoint control, and cloud-native platforms, which supports premium multiples for PANW and CRWD even in a choppy tape. The key risk is not product obsolescence but budget scrutiny: if CIOs delay discretionary software, the group can still lag for a few weeks despite strong long-term thesis support.

TJX is the cleaner consumer hedge because it benefits from trading-down behavior before it benefits from any recession. That matters over the next 1-2 quarters: if gasoline and food inflation remain sticky, value retail can take share even if unit demand is flat, which gives TJX a better earnings path than full-price apparel or big-ticket retail. The consensus may still be underestimating how quickly margin resilience can show up if inventory discipline stays tight into the print.

The contrarian setup is in semis: the market is treating the AI buildout as one trade, but beneficiaries are fragmenting. Names with direct AI exposure and lower supply-chain complexity should keep getting supported, while middleware/legacy handset or mixed-exposure semis can underperform as flows chase cleaner stories; that dispersion is likely to persist for weeks, not days. If sentiment toward AI-stock launches keeps pulling incremental capital, the losers may be the more idiosyncratic semis rather than the AI leaders.

Key Decisions for Investors

• Maintain/add to PANW and CRWD on any 1-2 day pullback; prefer a 3-6 month horizon. Risk/reward remains favorable because the market is paying for recurring defense spend rather than software growth alone, and AI-related security urgency should support multiple durability.
• Initiate a pair: long NVDA or AVGO vs short QCOM for 4-8 weeks. The trade expresses flow concentration into cleaner AI winners while hedging against continued dispersion in mixed-exposure semis; stop if QCOM reclaims relative strength on guidance or handset demand stabilization.
• Buy TJX into the next earnings window, using a staggered entry over the next 5-7 trading days. The stock is positioning as a consumer-downturn hedge with better downside support than discretionary retail; risk is a short-term multiple de-rating if management sounds cautious on traffic.
• For more aggressive accounts, buy a PANW/CRWD call spread into the next 1-2 months. The setup is to capture continued cybersecurity multiple expansion, with defined risk if the market rotates back to cyclicals or software de-rates broadly.
• Avoid chasing CSCO after the initial rerating; use strength to trim if already long. The near-term risk/reward is less attractive after a catalyst-driven move, and the stock may revert to a slower growth/AI-infrastructure utility multiple once the earnings reaction fades.