Jim Cramer Says Amazon.com, Inc. (AMZN) ‘Is The One That Is Really Rivaled’

Cramer on AI Spending: A Shifting Landscape?

The AI landscape is undergoing a seismic shift, and CNBC’s jim Cramer has a front-row seat to the drama. He recently discussed the potential ripple effects of China’s DeepSeek AI models, which promise significantly lower development costs than their Western counterparts. Since November 2022, when the AI wave surged, businesses have enthusiastically poured hundreds of billions of dollars into acquiring AI GPUs and building vast data centers to house them. This frenzy even spurred president Trump to announce a $500 billion “Stargate” project earlier this month. However,the ground beneath this AI gold rush is trembling.

On Monday, data center stocks plummeted, wiping out a staggering trillion dollars in market value. Panic is gripping the market as investors grapple with the possibility that these lower development costs could drastically reduce the demand for these enormous data centers.Amidst the uncertainty, Cramer sees a divided market response.

“The lower costs are the theme of the moment as some people saw it coming,” he observed on CNBC’s “Squawk on the Street,” pointing out that while some major players – he cites individuals like Mark Zuckerberg and Elon Musk as prime examples – seem undeterred and continue to invest heavily in AI infrastructure, others are betting against the industry. He notes a segment of investors “buying double shorts of NVIDIA,” indicating a bet on a decline in the company’s stock, which is seen as a bellwether for the AI hardware sector.

Interestingly, Cramer also describes a third group of investors who seem nonchalant about the implications of lower development costs, dismissively comparing their reaction to applying “hand cream” to the situation.

So, what would signal a permanent shift in the narrative surrounding AI spending? Cramer identifies two key triggers. “One would be if Three Mile Island is not reopened. That would be one I need to hear,” he stated, suggesting that a lack of new nuclear power capacity could become a critical constraint on the immense energy needs of AI development.The other indicator would be reports of order pullbacks for GPUs – the specialized chips essential for AI processing. So far, he hasn’t seen that materialize.

“But that’s not necessarily what people are going to announce,” Cramer cautions. “They’re not going to say, ‘Listen, I’ve decided if this thing only needs one-tenth of the power, one-tenth of the compute, well I’m going to cut my orders by nine-tenths.'” He believes the situation is unfolding rapidly, fostering a sense of urgency and momentum, as he concludes: “I’ve not heard that yet, but this thing is … a steamroll.”

Cramer on AI Spending: A Shifting Landscape?

The recent selloff in AI stocks has sent ripples through the market, prompting experts to analyse the evolving landscape of AI spending. Renowned financial commentator Jim Cramer recently shared his insights, highlighting the potential impact of China’s DeepSeek AI models, which promise significantly lower growth costs.

Speaking with Archyde’s Finance Editor,Sarah Chen,Cramer delved into the implications of DeepSeek on the industry. He believes this advancement is a driving force behind the recent market compression, notably in NVIDIA’s margins. “I think that there will be, and I think that’s why you’re seeing some compression [NVDA margin compression]. But until someone actually has a better chip. An actual better chip. And there we have to see Amazon. Now Amazon’s going to report. Amazon is the one that is really rivaled,” cramer stated.

While DeepSeek’s emergence poses a challenge, Cramer recognizes Amazon’s potential to navigate this shift. Amazon’s vast resources and established infrastructure give it a strong foundation. Moreover, its commitment to internal chip development positions it to potentially capitalize on the changing AI hardware landscape.

According to Cramer, the battle for AI supremacy will ultimately come down to chip technology.While Amazon is a strong contender, the company will need to demonstrate its capabilities in this critical area.

The DeepSeek Effect: Is AI Spending About to Change Forever?

The AI world is buzzing. DeepSeek, a new player with significantly lower costs, has thrown a wrench into the established order. “It’s a pivotal moment,” says investment guru Jim Cramer. “The lower costs are the talk of the town. We’ve been seeing these models get better and more efficient, and it was only a matter of time before they started challenging the status quo.” Heavyweights like Meta’s Mark Zuckerberg and Tesla’s elon Musk are doubling down on AI infrastructure, sensing the potential of DeepSeek’s disruptive technology.

But the market response is far from uniform. “There are three distinct groups,” Cramer explains. “You’ve got the bullish crowd who believe this is a boon for AI adoption, more companies will jump into the ring, driving innovation and growth. Then there are those betting against the current narrative, expecting a pullback in AI spending and a decline in Nvidia’s dominance. And then there’s a third group – they’re treating AI spending like a fad. It’s almost like they’re saying, ‘Oh, this DeepSeek thing will blow over.'”

Secondary players Could Benefit

While Nvidia, the current titan of AI chip manufacturing, faces pressure from DeepSeek’s lower prices, Cramer suggests that secondary AI chip makers could be positioned to benefit from the developing landscape. “It’s a dynamic situation,” he says. “It’s too early to tell the long-term effects, but specific signs—like major order cancellations for GPUs or even unexpected shifts in the energy sector, like the Three Mile Island situation – could signal a major change in the narrative.”

What Signals Lasting Change?

For Cramer, concrete actions will be the indicators of real and lasting change in AI spending patterns. “It’s all about what companies actually do,” he states. “If we see companies that previously committed to large-scale AI builds suddenly canceling those orders, that would be a major red flag.

But for now,” he adds,”it’s a quiet shakeup.Companies aren’t being transparent about their reassessments.” The coming months will be crucial for understanding how DeepSeek’s arrival will ultimately shape the future of AI.

What do you think about the potential impact of DeepSeek? Will its lower costs lead to a sustained shift in AI spending, or is this just a temporary blip? Share your thoughts in the comments below.

How are investors reacting to the decreased spending on AI by companies like Meta, and what does this mean for the future of AI investments?

Cramer on AI Spending: A Shifting Landscape?

The recent selloff in AI stocks has sent ripples through the market, prompting