Jim Cramer advised investors to beware of greed in stocks whose prices have surged in a parabolic move and to take profits.

On July 28, CNBC reported that Cramer said stepwise risers could be a better long-term choice than stocks that spike.

Cramer said fast-rising stocks can offer big profit opportunities in a short period, but declines can be just as swift when momentum breaks. "I want to tell you to pick stepwise gainers," he said. "Parabolic movers look like they let you make money faster, but the important point is that it just 'looks' that way." He added, "You haven't made money until you sell," and said most investors inside a parabolic run ultimately cannot sell.

The warning came as stocks that had surged on expectations for AI infrastructure and data centre expansion underwent sharp corrections. Related stocks that climbed strongly in the first half have fallen steeply in recent weeks. SanDisk shares have fallen more than 50 percent from their June 25 peak after a large rise that began last year.

Cramer said his portfolio, when dealing with such stocks, chooses to cut exposure when prices move in a parabolic pattern rather than trying to time the top. "When a stock moves in a parabolic pattern, I always advise you to cash out some," he said.

He cited Arm Holdings and Corning as examples. The portfolio held Arm Holdings for several months and sold the entire position on July 8. It took profits several times during sharp run-ups in May and early June, then moved to a final exit after judging volatility to be excessive. Arm Holdings shares have fallen 44 percent from their June 18 peak.

Corning was similar. The portfolio cut its Corning stake several times in late June to lock in gains. After that, the momentum behind the rise weakened, and Corning shares fell more than 50 percent from their all-time high on June 29. On July 28, the stock fell 12 percent even after it posted second-quarter earnings that beat market expectations. Cramer said he remained positive on Corning's long-term outlook.

Cramer also drew a line at the idea that such plunges automatically create a buying opportunity. He said selling pressure can persist for a long time after a parabolic rally collapses even if a company's fundamentals have not changed much. "Don't give in to temptation," he said. "Stocks that fall after a parabolic surge can look cheap, but all shareholders are trying to find a way out."

His remarks reflect a recent rise in volatility in AI and data centre-related stocks. Regardless of earnings or long-term prospects, Cramer again stressed that overheated prices can snap back sharply if sentiment breaks. He presented as a core response setting a rule for staged selling during a rise rather than chasing surging stocks, and avoiding approaches based only on price even after a sharp fall.