CNBC host Jim Cramer warned Thursday that the slide in AI-linked shares may continue as debt-funded data-center projects face possible regulatory delays, CNBC reported.
Micron fell 17%, GE Vernova dropped 7% and Sandisk slid 22% Thursday. All three had also posted steep declines Wednesday, extending losses across chip and AI-infrastructure stocks, CNBC reported.
Cramer’s concern centered on smaller developers CoreWeave, Iren and Nebius, which borrowed to finance data-center construction. Their projects could face regulatory delays as opposition to new facilities after the midterm elections raises questions about future AI infrastructure spending, CNBC said. The issue follows Cramer’s earlier warning that political opposition could delay data-center projects.
Cramer said debt tied to those companies was his main concern, but no significant borrower was defaulting at the time. He characterized that exposure as insufficient on its own to sink the market.
He argued that investors had priced in continued rapid construction, leaving technology shares vulnerable when doubts about future spending emerged. Cramer said many companies caught in the current decline remain profitable, unlike speculative businesses that collapsed during the dot-com bust. He described the pullback as an adjustment after technology shares had climbed too far.
CNBC said Cramer viewed a swift decline as a way to clear excesses from the AI boom more quickly than a prolonged slide. He also urged investors to keep enough cash to avoid panic. Cramer also pointed to lower rates and easing inflation, along with a possible end to the Iran war, as positive signs.
