Hardware sector is seeing a triumphant comeback, says Jim Cramer

Summary

• Jim Cramer argues that current market action is dominated by a tech war between hardware and software, overshadowing geopolitical events like the Iran conflict.
• Hardware stocks, particularly those leveraged to AI such as NVIDIA, Intel, and AMD, are experiencing a "triumphant comeback" and sharply outperforming software.
• Software stocks, represented by the IGV ETF, are broadly down, with significant declines in components like Palantir (-7%), Microsoft, Oracle (-3.7%), Salesforce (-3%), and Crowdstrike (-7%).
• Cramer provides historical context: software dominated for decades after Microsoft's IPO, but now hardware is "eating the software that ate the hardware" due to AI-powered machines.
• He emphasizes that investors should "get used to" hardware beating software, describing the software camp as "ready for the embalmer" and hardware as "headed for the pantheon of greatness."
• In caller segments, he notes Reddit's stock is suffering amid this trend, down 40%, but believes the company itself is fundamentally good, highlighting uncertainty about the bottom.
• The shift is driven by AI adoption, with hardware companies like semiconductor equipment makers (Applied Materials, Lam Research, KLA, ASML) also "killing it."
• Key risk: Market focus could revert to geopolitical narratives, or software companies might adapt, but Cramer suggests the hardware-led trend is persistent for now.