Jim Cramer is looking beyond artificial intelligence for stock ideas as Wall Street’s hottest trade becomes more volatile.
The CNBC host said investors should consider VF Corp and Kontoor Brands, two apparel names that have spent years outside the market spotlight but are attracting analyst support.
“VF Corp and Kontoor have already come down dramatically from their highs… I think the environment’s baked in,” Cramer said on CNBC.
The timing matters, as Thursday’s market showed investors rotating into healthcare and consumer stocks while several AI-linked names remained under pressure.
AI weakness is creating room for market rotation
Thursday offered a clear example of divergence rather than outright risk-off selling.
The Dow rose 1.08% and the S&P 500 gained 0.33%, while the Nasdaq advanced just 0.08%. Nvidia fell 1.8%, Dell dropped 6.9% and Hewlett Packard Enterprise lost 7.1% as investors continued questioning the financing and profitability of the AI infrastructure boom.
Eight of the S&P 500’s 11 sectors finished higher, with healthcare leading the advance.
Saxo chief investment strategist Charu Chanana said the key question is whether the AI correction produces “contagion or rotation”.
She argued that resilient economic growth could push investors towards areas such as healthcare, financials and industrials where valuations are less demanding.
That is where VF and Kontoor fit, as they do not need investors to abandon AI. They need portfolio managers to broaden exposure after years of concentrated technology leadership.
VF stock depends on a real Vans turnaround
VF is the clearer turnaround trade. The owner of Vans, The North Face and Timberland has spent years trying to repair its balance sheet and stabilise Vans after a prolonged sales decline.
Recent analyst moves suggest confidence is beginning to improve.
Williams Trading raised its VF price target to $22 from $20 on Thursday and maintained a Buy rating. The firm lifted revenue estimates for Vans, Timberland and other divisions and expects VF to raise its fiscal 2027 guidance when it reports later this month.
Williams sees improving trends at Vans and Altra offsetting some softness at Timberland. At around $16.50 before Thursday’s move, its target implied roughly one-third upside.
The investment case depends on more than a low valuation. If Vans moves from stabilisation to genuine growth, earnings estimates can rise alongside the multiple investors are willing to pay.
Kontoor stock offers denim growth and buybacks
Kontoor presents a different setup. Jefferies upgraded the Wrangler and Helly Hansen owner to Buy from Hold this week and raised its target to $89 from $82.
The firm called Kontoor a “compelling” multiyear growth story and said its valuation looked “overly pessimistic” given opportunities across both brands.
The underlying numbers support some of that optimism. Kontoor’s second-quarter revenue rose 19%, helped by the Helly Hansen acquisition and 2% growth at Wrangler. Adjusted earnings per share increased 13%, and management raised its full-year outlook.
Kontoor also plans a $400 million accelerated share repurchase after completing the sale of Lee, part of a broader plan to return more than $900 million through buybacks, dividends and voluntary debt reduction this year.
That gives investors a clearer cash-return catalyst than many high-growth AI names currently offer.
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