CNBC’s Jim Cramer said Wednesday that AI data center trading is regaining its place at the center of the market.
“Today was the day you bet on data centers and you get stomped on,” the “Mad Money” host said. “Of course, the best time to buy was when Situational Awareness forced you to sell your holdings… but let’s just say prices are still below their peak and now look poised to rise further.”
Many once-popular AI infrastructure stocks began to cool down in late June, and continued to struggle through most of July until the highly leveraged fund Situational Aware was forced to unwind. The development has started to rally within the group, and Kramer said some developments in recent days suggest the pressure is off and the fundamentals behind building AI are taking over again.
The first signs of improvement appeared in intelsaid Kramer. The company increased its recent offering from $15 billion to $20 billion due to strong investor demand, but larger deals remain sold out.
Then the server maker said: super microcomputer and photonics suppliers lumen neocloud follows strong quarter after reporting better-than-expected results on Tuesday evening Nevius on wednesday.
Neocloud friends core weave Tuesday night’s results were perhaps the most important confirmation, Kramer said. The data center operator provided evidence that it was older. Nvidia He said GPUs could remain valuable for much longer than skeptics expected, which addresses a key concern surrounding efforts to securitize AI computing power. Nvidia recently announced an agreement with six of the world’s largest asset managers for a $500 billion financing aimed at treating computing infrastructure like a borrowed asset.
“These chips aren’t like a car, which loses half its value the second you drive out of the parking lot,” Kramer said. “They’re more like fine jewelry.”
He said Wednesday’s positive CPI results provided further tailwinds by easing some of the interest rate pressures weighing on growth stocks.
Overall, Cramer said these developments have restored confidence in AI infrastructure stocks after the group lagged behind financials, healthcare companies and retailers for several weeks.
“I cannot overstate how important today’s session was,” Kramer said. “This morning, rockets exploded and the bullfighters of six legendary companies – Supermicro, Nvidia, Intel, Nevius, Lumentum, and Coreweave – tore from their enclosures and began trampling unbelievers who didn’t realize they were risking their lives by betting on these companies.”
