CNBC’s Jim Cramer analyzed Thursday’s market trends, worrying about a decline in the broader technology sector and suggesting that insider sales at certain companies are reminiscent of the dot-com era.
“Today was a scary day, but especially for tech stocks, especially data center and AI stocks. Money is either going to the sidelines or moving out of tech and toward high growth,” he said. “I don’t want to let go of companies that are really making money around AI, and[the CNBC Investment Club Charitable Trust]didn’t do that. But when you look at companies like that, you understand the mania. And this company feels like it’s starting to unravel.”
Cramer said he has become more wary of speculative stocks related to artificial intelligence and data centers in the past few months, indicating that investors are no longer making easy money in many of these companies. He expressed concern about some “fringe companies” in the data center space, particularly quantum computing and alternative power companies that have a history of losing money. OpenAI’s large spending on AI infrastructure is also a concern, he continued.
Kramer said he is concerned about insider selling and secondary sales by executives at many of these companies, especially AI-related crypto companies. He recalled the market environment 25 years ago. At the time, a slew of dot-com companies were going public, looking to raise more money, while insiders were selling their shares.
But he stressed that comparisons to the dot-com era are not absolute, suggesting there are many profitable tech giants betting on AI that could protect entire sectors.
“In 2000, these types of companies ended up demolishing this entire hideous edifice,” he said. “Now, I don’t think we’ll see that happen again. Why? Because all the big hyperscalers we’re talking about have more money than they know what to do with.”
