Jim Cramer says the AI boom has 'the power to keep the country's economy humming'
CNBC’s Jim Cramer remarked Thursday’s economy pullback was healthy after the “parabolic” run in many AI-related stocks.
Despite growing concerns around slowing consumer spending, hiring, and geopolitical tensions, Cramer remarked the AI buildout remains powerful enough to continue supporting the broader economy.
CNBC’s Jim Cramer remarked that he’s not worried about the sector taking a breather because the artificial intelligence boom remains powerful enough to keep driving stocks higher.
All three major indexes closed lower Thursday after the tech-heavy Nasdaq Composite and S&P 500 hit intraday highs earlier in the session. The Dow Jones Industrial Average shed 313 points, or 0.63%, while the Nasdaq Composite fell 0.13% and the S&P 500 declined 0.38%. Still, Cramer remarked the pullback was healthy.
“We need a little rest. We want stocks to cool off,” the “Mad Money” host stated, noting that many AI-related names have made “parabolic” moves in recent weeks.
Despite growing concerns around slowing consumer spending, weaker hiring, and geopolitical tensions, Cramer argued the market’s weakness looks more like a pause than the start of a prolonged downturn because the AI theme remains too strong to ignore.
“My faith in this marketplace comes down to the opportunity to get you involved in what one of our guests tonight, Nvidia’s Jensen Huang, correctly calls the fourth industrial revolution: artificial intelligence,” Cramer stated, referencing his interview later in the show with Huang alongside Corning CEO Wendell Weeks.
Cramer commented investors continue underestimating the scale of the AI-driven transformation underway across the economy. Its benefits have spread to a stack of interconnected industries from power generation, HVAC and semiconductors to cloud infrastructure and cybersecurity.
“Every one of these layers I just mentioned is like a giant American jobs program,” he commented. “They all collectively have the power to keep the country’s economy humming.”
While Cramer acknowledged the economy could see additional short-term weakness after a powerful rally, he argued the broader AI buildout remains intact and powerful enough to continue supporting stocks despite concerns about the Iran war lingering, interest rates and weakening consumer spending. This also touches on aspects of dividends.
“Because you have to ask yourself, what do any of those have to do with the price to earnings multiples of Nvidia or Corning?” he mentioned.
Disclaimer Furthermore, experts in dividends note the continued relevance.
Questions for Cramer?
Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer’s earth? Hit him up!
Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com