Jim Cramer urged viewers to avoid buying new tech stocks as Intel, Tesla, and Alphabet are set to announce earnings this week. Instead, he recommends allocating fresh capital to industrial and financial sectors, highlighting FedEx, Honeywell Aerospace, and Goldman Sachs as preferred options amid ongoing market volatility.

Inverse-Cramer Effect and Recent Calls

This move follows a notable pattern for Cramer, who previously endorsed Intel as his top chip stock on July 15. Shortly after his bullish call, Intel shares declined approximately 8%, despite a manufacturing milestone reported by ASML. This reversal echoes a recurring Wall Street joke where traders often find gains by betting against Cramer's on-air stock recommendations, a phenomenon seen before with Nike, which fell 15% after his positive call.

Nevertheless, Cramer has made bullish recommendations in certain areas. For example, he advised buying Nvidia even as the wider AI chip sector experienced a selloff, reflecting selective confidence within tech subsectors.

Upcoming Earnings Expectations

Intel is scheduled to report its second-quarter results on Thursday, July 23. Analysts forecast earnings of approximately $0.21 per share, a turnaround from a $0.10 per-share loss in the same period last year. Revenue is expected to reach about $14.4 billion, marking nearly a 12% increase year over year.

Alphabet and Tesla are both due to report earnings on Wednesday, July 22, after market close. Consensus estimates project Alphabet's earnings at $2.87 per share, representing a 24.2% year-over-year rise. Google's Cloud revenue is anticipated to hit $22.79 billion, an increase of 67.3%. Tesla, having delivered 480,126 vehicles last quarter well above forecasts is expected to report revenue near $25.81 billion and earnings of $0.50 per share. Its stock trades at a forward price-to-earnings ratio of 177, the highest among mega-cap peers.

Some analysts see potential for a bullish momentum in chip stocks if Alphabet's cloud and AI hardware segments outperform expectations. If all three companies report strongly, Cramer’s avoidance of tech this week may prove premature. Conversely, a disappointing earnings season would support his sector rotation and keep the Inverse-Cramer Effect dormant for now.

This material is informational and does not constitute financial advice.