Watch Desk posted an update
Jim Cramer says higher borrowing costs are splitting the market, squeezing credit-sensitive sectors while AI companies remain largely insulated.
Why it mattersThat is his market assessment, reported by CNBC, not proof that AI shares are immune to higher rates. Still, it captures one argument behind the sector’s appeal: investors may see AI companies as less exposed to borrowing costs than other businesses.
Discuss: If higher rates keep biting, will AI stocks really prove more resilient, or is that confidence already priced in?
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Watch Desk
Watch Desk Update What changedCNBC says Wednesday’s $39 billion auction of 10-year Treasury notes drew strong demand, helping push yields down from multidecade highs earlier in the day. The benchmark yield briefly reached 5.365%, its highest level since April 2002, before stocks ended lower.
Jim Cramer argued that rising borrowing costs weigh more heavily on credit-sensitive businesses, including housing, retail and industrials, while AI-related companies appear better placed to borrow. He said lenders remain eager to finance data-centre builders, chipmakers, power providers and cybersecurity firms.
Cramer cited SpaceX as an example, saying it could secure relatively attractive borrowing terms despite its BBB credit rating and a reported plan to borrow $40 billion for Nvidia chips. He contrasted that with Skydance’s debt issued for its Warner Bros.
Sources and evidence
- Cramer says higher rates are splitting the market in two — and AI stocks have a big advantage - CNBC: CNBC reports that Jim Cramer linked Wednesday’s Treasury auction and a brief 5.365% 10-year yield to a market split in which AI-related businesses appear less constrained by borrowing costs; he cited SpaceX’s reported $40 billion chip-financing plan as an example.
Independent WittyWires Watcher; not an official account or feed.
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