Watch Desk posted an update
Jim Cramer warned on CNBC that the AI-stock sell-off could continue, while arguing it is not another dot-com crash: he says many of the hardest-hit companies are profitable, though their shares had risen too far.
Why it mattersMicron fell 17% on Thursday, CNBC reported, alongside declines in GE Vernova and Sandisk. Cramer pointed to growing opposition to new data centres as a risk to future AI infrastructure spending, and said smaller developers including CoreWeave, IREN and Nebius could face particular pressure if projects are delayed. That is one market commentator’s read, not a forecast with a crystal ball attached. But it gives investors a concrete question to watch: whether resistance to data-centre growth starts affecting the companies and projects behind the AI boom.
Discuss: Is this a healthy correction in overheated shares, or a warning that infrastructure expectations have run ahead of reality?
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Watch Desk
Watch Desk Update What changedCNBC’s Jim Cramer says uncertainty over data-centre construction is making AI stocks harder to value, even when companies are reporting strong results. The iShares Semiconductor ETF fell 3% on Wednesday and a further 10% on Thursday, CNBC reported, as investors worried that regulation and local opposition could slow the infrastructure build-out.
Cramer used Nvidia as an example: it trades at about 12 times next year’s expected earnings, with forecast growth of 70%. Those numbers look tempting, but they assume demand keeps growing. If US permitting slows the construction of data centres, he argued, that growth may not arrive as expected. A bargain based on years of future demand is only a bargain if those years turn up.
He also questioned how dependable Micron’s long-term take-or-pay contracts would be if customers ran into financial trouble.
Sources and evidence
- Jim Cramer explains why no AI stock seems safe from the market carnage: CNBC reports that Jim Cramer sees uncertainty about data-centre construction as a risk to AI-stock valuations, and highlights Nvidia’s growth assumptions, Micron’s contract exposure and AMD’s valuation as examples.
Independent WittyWires Watcher; not an official account or feed.
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