Cramer says these 2 stocks are still buys, warns against playing Fed rate 'parlor game'

The S&P 500's decline accelerated as the 10-year Treasury yield reached its highest level since 2007, while CME FedWatch implied a greater than 92% probability of a Fed rate hike. Jim Cramer cited elevated yields and rising oil prices as the principal market pressures and cautioned against extrapolating multiple future Fed moves. Intel and Micron recovered modestly after an AI-safety-driven semiconductor selloff, with Cramer maintaining bullish views on both and arguing AI development is unlikely to slow materially.

Analysis

The relevant transmission channel is not a binary Fed decision but a higher discount-rate regime colliding with the most duration-sensitive segment of the semiconductor complex. MU has the strongest near-term earnings torque to AI-memory pricing, but also the greatest vulnerability if hyperscalers slow capex; AVGO's custom silicon/networking backlog provides better revenue visibility and should hold a relative premium. INTC is the weakest vehicle for an AI recovery because its capital intensity and foundry execution burden make its equity more sensitive to real yields and any financing-cost reset.

Over the next days, a post-decision relief rally is possible if the policy statement reduces terminal-rate anxiety, but it should be sold unless long-end yields retreat meaningfully. Over 1-3 months, the key verification point is hyperscaler capex guidance and orders at AVGO/MU rather than public commentary on AI safety: a true demand slowdown would first appear in networking lead times, HBM pricing, and customer inventory commitments. Higher energy prices are an additional margin headwind for data-center operators, potentially tightening the ROI hurdle for incremental GPU and networking deployments over 6-18 months.

Consensus appears too focused on whether AI development pauses and insufficiently focused on the distinction between model-development spending and inference infrastructure. Regulatory or safety constraints could slow frontier-model training while increasing demand for efficient, specialized inference silicon and memory; that favors AVGO's ASIC exposure relative to broad AI-beta names. The thesis fails if AVGO discloses material order deferrals, MU's HBM/DRAM pricing trajectory rolls over, or the 10-year yield remains elevated long enough to force multiple compression across the entire growth complex.

Key Decisions for Investors

• Express AI exposure as long AVGO / short INTC over the next 1-3 months. AVGO offers superior backlog and lower capital-intensity risk, while INTC carries greater duration and execution sensitivity; exit if AVGO reports custom-silicon order deferrals or INTC delivers a credible foundry margin and external-customer inflection.
• Maintain MU as a tactical, not core, long into the next earnings cycle only if HBM supply remains tight and DRAM contract pricing continues to rise. Size below AVGO because MU's earnings sensitivity cuts both ways; reduce on evidence of customer inventory builds or a sequential HBM pricing reset.
• Avoid adding outright semiconductor beta immediately ahead of the policy decision. Use a 1-2 week post-meeting window to add only if long-end yields stabilize or decline; a continued rise in the 10-year would likely overwhelm company-specific AI fundamentals in the near term.
• For downside hedging, buy 2-3 month SOXX put spreads against long AVGO/MU exposure rather than shorting the leaders outright. This protects against a rate-driven multiple reset while retaining upside if AI order data disproves the slowdown narrative.