Jim Cramer called the selling in Linde stock “beyond stupid” after the industrial gas giant announced a major long-term contract to supply ultra-high-purity gases to Taiwan Semiconductor Manufacturing Co. in Arizona, calling it “the biggest, best contract” the company could have won.
Linde shares fell 5.9% on July 31, 2026, the day the company reported better-than-expected second-quarter earnings and disclosed the Taiwan Semiconductor deal. The stock’s decline came despite record sales of $9.29 billion and adjusted earnings per share of $4.50, both beating analyst expectations.
The selloff was driven by disappointing forward guidance, not the contract itself. Linde’s third-quarter earnings guidance of $4.45 to $4.55 per share fell short of the $4.59 consensus estimate. The company also reported adjusted operating margins of 29.5%, down 60 basis points year-over-year, primarily due to cost pressures in its U.S. homecare business, Lincare, which faces labor cost inflation and insurance reimbursement challenges.
The Taiwan Semiconductor contract represents a significant long-term growth opportunity for Linde. Under the agreement, Linde will invest approximately $1 billion to build, own and operate two new air separation units and associated infrastructure in Phoenix to supply nitrogen, oxygen and argon to Taiwan Semiconductor’s expanded manufacturing complex. Separately, Linde’s Taiwan joint venture will invest about $800 million to support the customer’s new semiconductor fabrication and packaging facilities in Taiwan.
Linde’s electronics business, which supplies gases to semiconductor manufacturers, grew 18% year-over-year in the second quarter—the fastest growth rate for that segment since late 2022. The company’s CEO, Sanjiv Lamba, stated on the earnings call that he expects electronics to remain the largest backlog contributor and one of the fastest-growing markets. Linde’s overall backlog reached a record $11.1 billion, up from $9.9 billion in the first quarter, signaling sustained demand from the AI boom driving semiconductor capacity expansions.
Cramer, who hosts CNBC’s “Mad Money,” said on his X account that the stock would decline for a couple of days before recovering, noting that Linde remains an “Investing Club holding.” His view reflects a common sentiment among analysts: the quarter’s weakness stems from near-term margin pressures and conservative guidance, not from any deterioration in Linde’s long-term competitive position or the strength of its semiconductor customer relationships.
Linde raised the lower end of its full-year 2026 earnings guidance to $17.70 per share, up from $17.60, while maintaining the upper end at $17.90, representing 8% to 9% growth. The company also increased its capital expenditure outlook by $500 million to between $5.5 billion and $6 billion for the year, with new projects in its backlog and its space business driving the increase.
Sources
- X (Jim Cramer) — Cramer’s post calling the Linde selling “beyond stupid” and citing the Taiwan Semiconductor contract
- Reuters — Linde’s $1 billion Arizona investment and semiconductor supply deal announcement
- Linde official press release — Details on the long-term agreement, investment amounts, and customer expansion in Phoenix and Taiwan
- CNBC — Analysis of Linde’s post-earnings decline, margin pressures from homecare business, and forward guidance
- Investing.com — Earnings call transcript and guidance details showing the margin miss and Q3 EPS guidance
