Amazon could be better placed than smaller cloud operators if resistance makes new data centers harder to build, CNBC host Jim Cramer said Monday, as investors assess future capacity for artificial intelligence computing.
CNBC said AI computing demand could persist even if new facilities are harder to bring online. Amazon and Microsoft already operate large networks that could help them serve more of that demand, the outlet said. Smaller cloud providers, often called neoclouds, rely more on opening new sites to grow, CNBC reported.
Cramer said a slower pace of construction could favor large incumbents. “If it's going to be slower, that does work for the incumbents,” he said on CNBC. He also said Amazon and Microsoft would be winners if providers had to move more slowly. Cramer pointed to Amazon's limited use of neocloud companies to supplement capacity, CNBC reported.
Amazon's stock was up 7% from the midterm election through Monday's intraday trading, CNBC reported. Microsoft and Alphabet, Google's parent company, also rose over that period. Micron fell 14.1%, Sandisk dropped 21.2% and CoreWeave lost 8.9%; those figures include Monday's intraday rebound, the network said.
The Nasdaq rose a combined 3.3% Friday and Monday after falling 5.5% Thursday, CNBC reported. Amazon's advance followed a difficult stretch: The stock closed at $284 on Aug. 3, then lost more than 15% by the end of October, finishing the month near $240. CNBC said investors had grown wary of the company's heavy AI spending.
CNBC said slower construction could ease pressure on large cloud companies to increase capital spending at the same pace. That could give cash flow room to recover and improve returns from data centers already operating, the outlet said. EconoTimes previously covered Cramer's plans to reduce data-center exposure after the midterm vote.
CNBC disclosed that Jim Cramer's Charitable Trust held long positions in Amazon, Microsoft, Micron and Nvidia.
