CNBC’s Jim Cramer analyzed Monday’s session and said stocks, especially tech stocks, managed to recover from last week as Wall Street looks ahead to the end of the government shutdown.
“The government could reopen and we’re getting back to business as usual, which means data center stocks are surging,” he said.
The index rose during the session, Dow Jones Industrial Average Ended at 0.81%, S&P500 1.54% plus high-tech elements Nasdaq Composite It increased by 2.27%. After weeks of deadlock, lawmakers moved toward a deal to pass a federal funding bill and end the government shutdown.
Cramer suggested that investors’ concerns about the ongoing government shutdown, which has disrupted air travel and weakened consumer confidence, contributed to last week’s market weakness. He added that the government shutdown could hurt gross domestic product (GDP) growth during the holidays, which is a large part of the economy. But Kramer continued, at the first signs of a deal, money was “coming back into the stock market.”
Cramer also noted that many investors became wary last week over the huge valuations of certain artificial intelligence stocks, including industry leaders. Nvidia and Palantir. But data center stocks soared on Monday, with Nvidia up 5.79% and Palantir up 8.81%. Kramer suggested that some of these companies are benefiting because hyperscalers are unwilling to stop ramping up AI for fear of being “left behind by the competition.”
“The stock market may seem crazy, but it’s not as crazy as you think,” he said. “That’s what everyone who shorted the AI play noticed today.”
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