On Tuesday, Jim Cramer expressed skepticism about the sustainability of the recent rally in AI-related stocks, which was driven by excitement over a $63 billion financing deal for Anthropic to acquire Broadcom's computing hardware.
While this deal indicates ongoing lender support for AI investments, Cramer pointed out that Anthropic is borrowing to fund this purchase rather than using profits, raising concerns about the financial health of smaller AI infrastructure companies, known as neoclouds, which are heavily indebted.
He specifically mentioned CoreWeave, whose bonds have yielded as much as 15%, and warned that negative news could overshadow any positive developments in the data center sector. Additionally, Cramer noted that the current calm in the bond market may be temporary, especially with the Federal Reserve's upcoming interest rate decision and potential geopolitical tensions.
He remains optimistic about the AI sector's long-term potential but believes that until financing challenges are addressed, caution is warranted