Cramer Urges Caution Amid AI Rally, Citing Debt Risks and Fragile Financing

CNBC’s Jim Cramer cautioned investors Tuesday against prematurely declaring the artificial intelligence trade fully restored, even as AI-related stocks rallied for a second consecutive session.

The advance was driven by renewed enthusiasm for chipmakers following an announcement that a consortium of banks and Blackstone had committed $63 billion in financing for Anthropic to acquire Broadcom computing hardware. Monday’s gains were similarly fueled by Anthropic’s S-1 filing. However, Cramer argued the renewed optimism fails to address the structural pressures that hammered the data-center sector late last week.

“I’m pleased that people feel so comfortable that tech is all good to go because there is money flowing back in,” the “Mad Money” host said. “I don’t think that’s a reason to call all clear. I think it’s a reason to look at other sectors in the economy.”

Cramer’s skepticism rests on three persistent risks.

First, he highlighted the vulnerability of smaller AI infrastructure firms—known as neoclouds—that have taken on significant debt to fund data-center expansion. Rising interest rates have amplified concerns about their ability to service those obligations. Cramer specifically named CoreWeave, whose bonds have yielded as high as 15%, along with Nebius and Iren. Despite a nearly 8% rebound in CoreWeave shares Tuesday, he warned that fresh negative headlines could quickly resurface.

“I have learned that after every positive story about anything in the data center, there will be a plethora of negative stories about something wrong, including CoreWeave,” Cramer said.

Second, Cramer questioned whether the Broadcom-Anthropic financing deal is as reassuring as the market assumes. While the $63 billion package signals lender willingness to back massive AI investments, he noted Anthropic is borrowing to purchase Broadcom’s technology rather than funding acquisitions from operating profits. “People don’t seem to grasp that [Anthropic] got the money in the Broadcom-arranged financing deal to purchase equipment from Broadcom,” he said.

Finally, Cramer warned that Tuesday’s calmer bond market may be fleeting. Oil prices declined and the 10-year Treasury yield dipped below 5%, temporarily easing borrowing costs for capital-intensive AI firms. However, conditions could reverse swiftly, particularly with the Federal Reserve’s rate decision Wednesday afternoon and Chairman Jerome Powell’s subsequent press conference. The upcoming midterm elections and potential Middle East escalation add further volatility.

“With the exception of Nvidia, these data center companies don’t have a lot of money. So they have to borrow the money,” Cramer said. “The rates are getting so high that the return is getting uncertain. That hasn’t changed at all.”

Cramer emphasized he remains “an unabashed believer in the AI build-out,” but insists the coast is not clear until the sector’s financing challenges subside.

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