The momentum in semi stocks could last as they have great earnings momentum, says Jim Cramer

Today we saw colossal buying in chip stocks as traders flock to last year's darlings that stalled out last week. NVIDIA led the group as usual, but we saw some terrific action. Some of the beaten down semis like AMD, ARM, Qualcomm. I think this move could last as these companies have great earnings momentum going into 2025. But there are some chips that frankly can't seem to get off the ground. The potato chips, which fared particularly badly in a little noticed new study out of Cornell's Business School that shows that GOP-1 weight loss drugs are having a real impact, a meaningful one that commands attention. There's a definitive drop in processed food sales in this country, and it is being linked to these GOP-1 drugs. First some background. In the middle of last year, a wave of fear came over the food group. These GOP-1s from Eli Lilly and Novo Nordisk were viewed as grim reapers, slashing earnings wherever they went. We figured food sales would come down, then earnings for supermarkets could get hurt. And at one point, at the height of fear, an analyst tried to assess the impact on aerospace and airlines. The poor people got thin. It all got pretty darn fanciful, and eventually rationality returned, along with buyers for pretty much everything. Now the hysteria is over. But maybe there was real cause for concern. This Cornell study that I like so much took a look at use patterns and concluded that, and I'm going to quote here, Households with at least one GOP-1 user reduced grocery spending by approximately 6% within six months of adoption. End quote. The study goes on to say, quote, Given an average monthly grocery expenditure of $630, this translates to an annual reduction of $416 per adopter. End quote. Hey, that is big money for most Americans. The GOP-1 drugs also reduced food consumed away from home, with breakfast spending declining by nearly 4%, and dinner down 6%, fast food particularly hard hit. I think you might see something about this when Grocery Chain Albertson's reports next Wednesday. At the very least, the supermarkets management should have to address this report's findings. But it's the packaged food companies themselves that have the most to fear. As the report comments, quote, Companies that rely heavily on caloric, dense, processed, or indulgent foods are likely to face declining demand and need to reassess their product portfolio to remain competitive. End quote. In fact, the Cornell report directly posits that sales weakness from Kraft Heinz and Campbell's might be attributed to the GOP-1s. According to the report, the food companies can protect themselves by changing package sizes or offering smaller portions, producing foods that are healthier and more convenient. I think that makes sense, but in the end, these companies are all about processed foods. Come on. It's awfully hard for them to change their stripes. Now, lots of investors have turned on the makers of the GOP-1s. Last night, I got a call from someone who complained about how miserably Eli Lilly's stock has done, in large part because he bought it in the 900s. I totally get that. I know the stocks plummeted in the 700s, a sickening of a great many shareholders. But I think that these drugs have multiple benefits, and their staying power, questioned by many negativists, may be stronger than the critics think. The pattern seems ingrained already, and the pain the processed foods were supposed to experience might finally be arriving. To me, it's simple. You should buy one kind of chip that's changing the world, the semiconductors, and avoid another kind of chip. Free delays. It's ironic. We used to regard the foods as safety stocks and the semiconductors as high-flyers with huge downside. Now there seems to be nothing safe about the foods. But the semis? Lots more staying power than anyone ever thought. I'd like to say, as always, more Market Summer, I promised I'd find it just for you, right here on MedMoney. I'm Jim Cramer. I'll see you Monday!