Jim Cramer reveals how to protect your stock portfolio amid AI chip rally

On April 28, the former hedge fund manager and popular TV host, Jim Cramer, took the time on his show to reflect on the April artificial intelligence (AI)-driven surge semiconductor stocks have experienced and to advise his fans on what to do under the circumstances.

Indeed, the analyst focused on the PHLX Semiconductor (SOX) sector index, which rocketed 34.75% between 7,802 on April 1 and its 10,513 high on April 24 before correcting 4.55% to 10,035 four days later.

Should investors be worried after SOX soars 34% in less than a month

While Jim Cramer highlighted that the ongoing month is the second best for chipmakers on record – the best ever took place in 2000, mere weeks before the Dot-com bubble burst – he also noted that the majority of other strong 30 and 31-day periods were nowhere near as precipitous.

As for a wealth-protection strategy, the TV personality recommended investors examine their portfolios whenever a sector rallies as much as semiconductors have and ‘trim’ the biggest winners, but don’t panic.

Instead, Cramer explained that it is important not to panic but also that ‘you can’t be a pig,’ and examine the next move for the relevant shares. According to the analyst, a moderate correction that leads to consolidation likely represents a buying opportunity ahead of the next leg of the rally:

“It is best if this fever breaks and the market cools off a bit. This kind of action doesn’t necessarily mean we are headed for a major top; it means that there might be an opportunity. Here’s the bottom line: when you see this kind of move, you don’t need to freak out, but you’ve got to be disciplined.”

On the flip side, he explained that both a continued parabolic rally and a price crash indicate that either selling or completely avoiding the involved assets is the correct move.

Jim Cramer reveals worst-case scenario after parabolic rally

As an example, Jim Cramer reflected on a company called POET Technologies Inc (NASDAQ: POET). 

Specifically, the TV host explained how he initially refused to reach a verdict on the company on account of it being so small that it is more of a ‘science project’ than an established business, before watching in horror as it started going parabolic.

Ultimately, however, Cramer explained he got something of a reprieve when the company announced that an especially large potential client cancelled the deal, leading POET stock to half in value in a day. 

The analyst also hinted that the reason for the cancellation might have been that the company executives were too vocal in their boasting about the agreement, remarking that ‘loose lips sink ships, especially ships like a stock.’

By press time, POET shares are effectively flat year-to-date (YTD), but also nearly 54% below their 52-week high, recorded as recently as April 23, 2026.

Lastly, while Jim Cramer emphasized that the April rally’s similarities are ‘ominously’ reminiscent of the start of the Dot-com bust, any conclusions would be premature for the time being. 

He, however, acknowledged that the exceptionally elevated level for semiconductor stocks relative to their 200-day moving average (MA) might be the more salient cause for concern while still urging restraint.

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