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LivestreamMenuCNBC’s Jim Cramer said Thursday that investors can avoid giving back big gains in high-flying stocks by following one simple rule. “When you get a parabolic move, sell half, because parabolic moves cannot be gamed,” Cramer said on ” Squawk on the Street .” “We do not know when they’re going to stop going up.” Parabolic moves are stock rallies that happen quickly and are huge — often starting with a legitimate reason, before the market’s animal spirits take over and push the stock to overheated levels. The danger is that they can disappear just as quickly and sometimes go down even harder. Several of the market’s biggest AI infrastructure winners have pulled back sharply this week after massive runs earlier this year. Micron fell 12%, Sandisk dropped 22%, and Dell slipped 7%, in what Cramer described as an “unwind” that sent money back into the likes of Amazon , Microsoft , and Apple . All three megacap hyperscalers are stocks in the CNBC Investing Club portfolio. While the recent “unwind” doesn’t change the long-term AI story, Cramer said it does underscore the importance of taking profits after outsized moves. “The one thing you never want to do is turn a gain into a loss,” he stressed. And, to be sure, Micron, Sandisk, and Dell are still way higher year to date. The ” Mad Money ” host pointed to Arm Holdings and Corning as examples of stocks that had become extended after huge advances. That’s why Cramer recently exited the Arm position for the Club and trimmed back Corning in a few sales in late June at much higher levels than where the stock currently trades. “A stock that goes parabolic in any single market is a stock that you have to cut in half,” Cramer said. Investors who wait for the unwind are “going to lose a huge amount of money over a three- or four-day period, and no one will know why.”
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