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Jim Cramer (0:16)
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Jim Cramer (1:41)
Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people made friends. I'm just trying to make you a little bit of money. My job is not just to entertain, but to do some teaching. So call me at 1-800-7-3 CNBC tweet Mitchum Kramer Today was an ambush, pure and simple. The sellers, they were waiting. They didn't care what Nvidia said last night. They probably didn't even listen. They decided from the get go that in video or any of the hardware tech stocks that have been up lately have now gotten too expensive. Instead, they want to swap into the left for dead software equities that they think represent good value. And that's how you end up with a session where The Dow gained 17 points, S&P lost 0.54%, but the tech heavy Nasdaq tumbled 1.18%. And a lot of that was the $10 loss in the stock of Nvidia, the world's biggest company. From the outside, today's action was just crazy. It was as if all the red hot tech hardware companies in video, amd, Western, Digital, Micron, Lamb Research, dozens of others suddenly lost their allure While the horrendous enterprise sulfur stocks and had their fortunes resurrected lazarus like and now must be bought and bought in a hurry before the big liftoff. Does that make any sense? Of course not. But it's what's known as a program. And on any given day, the program can rule over the actual market. Today, the out of hardware into software program that I spotted ruled the day. Allow me to explain. When I got started Goldman Sachs, I put together baskets of stocks represented different themes. Remember, that was long before we had ETFs. These baskets would let you make an immediate move on a host to say, pharmaceuticals or dump the semis, maybe short the financials. You can move quick, fast in a day, one session. No matter how much stock you had to accumulate, you could upend your whole portfolio. Put it in a totally different position. Of course, my portfolio moves never impacted the market. They were never big enough. But the program I saw today was gigantic and unforgiving, with a very simple logic. So sell the tech winners and buy the tech losers. No matter how well or poorly the actual individual companies may be doing. Most people don't understand how these kinds of programs work. They're not based on the specific fundamentals of individual companies. They're based on intuition. I believe that the market's paying too much for one kind of company and not, let's say, not enough for another. Now, in order for these huge programs to work, you need to wait for something that can hide what you're doing. The hedge funds that do these programs love camouflage. Last night Nvidia gave it to them by reporting a spectacular quarter with amazing growth and a roadmap to make trillions of dollars in a very short time frame. The gross margins were fantastic, the level of business extraordinary, the new clients fabulous. It was a tour de force quarter, but it made a terrific case for the next wave of artificial intelligence where these machines will actually be able to reason. Nvidia's new superchips are going to come out on time later this summer. We learn of a huge amount of business from anthropic and open air to not yet public companies that are taking the world by storm. Oh, and let's not forget the self driving cars and robots and digital twins that Jensen Wong CEO has told you are coming. They're here. Basically, Nvidia gave you everything you could ever want, including terrific guidance for the current quarter. The buyers all knew, which is why the stock caught fire last night and was really climbing. But it was all for naught. Why? Because today in video stock became cannon Fodder for the unannounced sell program that I detected from the moment the market opened. The stock started giving up points right at the opening bell. Crushed by a torrent of sellers. It was just unbelievable. And you can see the footprints of the suburb all the way down. If you know how these things work. And I do. Telltale sign it didn't matter how low Nvidia shares went. Did you notice that the decline was relentless? They never let up. They never let the bids build, let the stock stabilize. The client wanted out of all these hardware stocks in the same fashion. Just get it done. I don't care. 4pm off the sheets. Frankie. You know what? It was a bit of a joke how the whole thing went down. It really didn't matter how well or bad the hardware stock was doing. It had to get butchered. Broadcom, a huge multi year semiconductor winner got crushed along with KLA and Micron and Western Digital. As someone who always says own Nvidia, don't trade it. I was appalled to hear all the lame justifications all day for the decline by people never executed program and didn't realize that the program ruled. I heard Nvidia's customers were running out of money. I heard Nvidia didn't get enough from China, didn't get enough sales in China, didn't get any. Even as they told us this was going to happen. I heard Nvidia gotten way ahead of itself. But it's actually a fairly inexpensive stock on earnings. I heard AMD is dipping at their heels. And while Google and Amazon's chips are taking share there. Well, Nvidia could be roadkill. Weird. AMD was actually still down 3.5% today. I'm telling you it was the program. It's ridiculous. Nvidia's customers are spending fortunes on equipment and they can afford to cover the costs. These are companies with excellent cash flows, which means it's easy for them to borrow money. We all know the Chinese ship is probably sailed. No surprise there. At the end of the day, the amount of money Nvidia is making is extraordinary. Is only get better. Second telltale sign that it was all just an artificial program and not the reality of business. The absurd relentless buying of the enterprise software companies that have been written off for debt. Consider workday. How many times did I hear in the last six months the workday was going to be crushed by Anthropic, an AI company that can, let's say, mimic pretty much every software company out there? I never fully believe that story, but it's partially true and it killed the entire cohort. The pessimism was so thick around workday the stock was practically untouchable. Sure enough, after reported Tuesday night stock dropped 12 points like that 130 down to 1 7,117 and change ultimately as the stock caught two downgrades and a ton of price target cuts. But then midday workday started to rally and it actually finished Yesterday up nearly three bucks for tackling another six today. This thing went up 22 points from yesterday's close. We saw the same thing with Salesforce when reported last night. It's not. I'm going to get that workday. It. It rallied huge from the intraday low. I'm sorry, it's this stock. It dropped a quick 10 points from 191. This is Salesforce. Then changed down to 182. It looked over the release and I saw it had a monster $50 billion buyback. I couldn't understand the selling, but I have no illusions. Eventually Salesforce's stock turned around and rallied furiously finishing the session up $7.82 to close all the way up at $199. I'm going to have more on this one later. But you have a program trade taking over the market. The companies on the no and buy list become winners. The fact that the quarter was excellent is almost beside the point. Workday's guidance was dismal and it's rally just as hard as we saw some huge rallies in service now. Atlassian Datadog, many others in the same cohort that have just been horrendous real dogs. Trust me. That, I tell you is nothing to do with the fundamentals and everything to do with the big switch I'm describing. This rebound was all artifice, people. We don't buy sectors, we buy companies. And I have no idea if the sub program with Nvidia is over. I'd use the program to buy the stocks you'd like at discounted prices to where they should be. That because I've got to tell you, one gigantic account can create prices and the prices you're getting are better than I thought. The bottom line though, don't take today as a referendum on anything. Someone with a lot of money, and I'm talking about tens of billions wanted out of one group and into another. The stocks were treated as playthings of that account, not companies. They were puppets on hedge fund strings and they got jerked around all over the place. I prefer when stocks represent the fundamentals of the underlying companies but on days like today don't be fooled. The program is all that matters. Let's go to Bill of Massachusetts. Bill.