The Stocks That Will Get Investors Home Safe When Tech Cracks
When tech stocks crack, most investors discover too late that their portfolios were far more concentrated than they realized. Jim Cramer and others are pointing to a handful of quiet winners that keep paying dividends no matter what chip stocks…
Jim Cramer used his October 15 Mad Money broadcast to argue that every investor needs a designated driver for their portfolio. He pointed out that stocks with no data center exposure have been soaring as money flowed into non-tech names. The examples he gave included consumer staples, waste haulers, and pharmaceutical companies.
He also warned that overconcentrated investors risk getting blown out and giving up on stocks altogether, as many did in 2000, 2008, and 2022. Cramer made a similar case in June, during an earlier break in data center stocks: “These stocks will lag while the data center roars, but they preserve your sanity when you get a tsunami-like sell-off in the hottest stocks out there.”
Quality Is Quietly Winning Across the Market
A Fast Money segment the same night picked up the theme: “All eyes are on semiconductors or hyperscalers, so nobody cares. Meanwhile, health care is doing some amazing things.” The show added that health care “is outperforming the S&P 500 for the year.”
Small caps share the same preference for profits: “Profitable Russell 2000 stocks have double the performance of non-profitable ones… Last year non-profitable small caps outperformed profitable ones 2 to 1. Now it’s essentially the opposite,” according to On Investing, Charles Schwab’s podcast. Volatility is creeping higher as well. The CBOE Volatility Index rose to 16.87 on October 14, which is still inside its normal range.
Staples Carrying the Load
Coca-Cola (NYSE:KO | KO Price Prediction) shares are up 33.1% year to date. Second-quarter adjusted EPS of $0.97 beat the $0.93 estimate, and management raised full-year guidance to 5% organic revenue growth and 9% to 10% comparable EPS growth, according to its 8-K filing. The chief executive credited an “all-weather strategy, building balanced, quality, top-line growth.”
Procter & Gamble (NYSE:PG) has raised its dividend for 70 consecutive years. Organic sales were flat in its fiscal fourth quarter. Fiscal 2027 guidance calls for core EPS to be in line to up 3% despite a roughly $1 billion commodity and transport drag. P&G still plans about $10 billion in dividends and $5 billion in buybacks.
Church & Dwight (NYSE:CHD) posted 5.8% organic growth, nearly double its 3% outlook, led by TheraBreath and Hero. It declared its 502nd consecutive quarterly dividend and raised its 2026 adjusted EPS outlook to $3.74 to $3.81.
Pharma and Trash Pickup Round Out the Ride
Johnson & Johnson (NYSE:JNJ) is up 22.2% this year, though shares have fallen 5.2% over the past month and slid after a MedTech miss in its third-quarter report. Second-quarter oncology sales rose 17.3% to $7.41 billion. Investors are now asking whether the planned Orthopaedics separation can fix the medtech side.
Merck (NYSE:MRK) has risen 36.4% year to date. Keytruda franchise sales reached $8.37 billion in the second quarter, and Winrevair grew 75%. The chief executive characterized Keytruda’s loss of exclusivity as “more of a hill than a cliff,” citing a pipeline of over 20 new products. The quarter’s adjusted loss of $0.13 per share resulted from a one-time charge related to the Terns Pharmaceuticals acquisition.
Waste Management (NYSE:WM) offers a different kind of stability. Core price rose 5.7%, and free cash flow grew 34.5% to $1.10 billion in Q2. Management cut revenue guidance but raised its margin outlook to 31.0% to 31.2%. Operating expenses stayed below 60% of revenue for the sixth consecutive quarter. The shares are up a modest 2.7% this year.
A Practical Concentration Check for Retirement Savers
Start by listing every holding, index funds included, and estimate how much of the portfolio depends on AI chips, cloud spending, and data center construction. Broad market funds can carry significant weightings in megacap tech, so actual tech exposure may be larger than it appears. Then consider how the portfolio would do if that piece fell sharply.
Boring holdings earn their place by paying you while you wait. These companies keep paying dividends regardless of what chip stocks do. Third-quarter reports over the coming weeks will show whether pricing power and raised guidance hold up with consumers under uneven pressure. P&G’s next dividend is scheduled to be paid on November 16.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.
