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- CNBC’s Jim Cramer said investors should look beyond the AI data-center trade as compelling opportunities emerge in other areas of the market.
- He highlighted aerospace, fintech, health care and energy stocks.
CNBC’s Jim Cramer said Tuesday that investors need to expand their horizons beyond the artificial intelligence trade.
“There’s more to life — and investing — than the data center,” the “Mad Money” host said. “The endless focus on the data center, and the anti-data center backlash, is obscuring opportunity after opportunity away from it, and I am no longer willing to tolerate you missing these.”
AI infrastructure stocks have soared this year, though many have pulled back in recent weeks. Cramer isn’t abandoning the trade, but he said investors have become too concentrated in one of the market’s hottest themes while overlooking opportunities elsewhere. He said he expects that AI buildout names will remain volatile at least until the midterm elections in November conclude.
“It’s just not worth it to load up the boat,” he said. “It’s better to have a few and then look elsewhere for the many opportunities that are right in front of you.”
Cramer first pointed to aerospace. GE Aerospace announced Tuesday it would spend nearly $12 billion to acquire aerospace castings supplier Consolidated Precision Products, a deal he said should strengthen the engine maker’s supply chain and help accelerate production. He said that could also benefit Boeing, a major GE customer that needs to ramp production to meet its large order backlog.
In fintech, Cramer highlighted trading platform Robinhood and buy now, pay later company Affirm. Robinhood has benefited from strength in crypto and prediction markets, but Cramer said its grip on younger customers is the bigger story. He also likes Affirm, which has 28 million active customers and partnerships with major companies including Amazon, Costco, Walmart and Apple.
Healthcare offers additional opportunities, he said. Cramer pointed to Hinge Health, which is primarily a digital platform for physical therapy with ambitions in other areas of healthcare, and Medtronic, whose stronger-than-expected results and improved organic growth have failed to meaningfully lift the stock.
“The stock is now where it was when it reported,” Cramer said of medical device maker Medtronic. “That’s crazy.”
Cramer also likes energy infrastructure, highlighting Enbridge and Enterprise Products Partners. Both offer dividend yields above 5% and stand to benefit from changing energy flows amid disruptions around the Strait of Hormuz.
Finally, Cramer pointed to biopharma giant Amgen, which he admitted takes “a little fortitude” after falling 10% Tuesday in response to a Novartis‘ cholesterol drug failing a late-stage trial on cardiovascular health. Amgen has a competing experimental drug in trials, explaining why its stock tumbled in sympathy with Novartis. However, Cramer said Amgen’s candidate is slightly different and, after the stock’s steep decline, much of the risk may already be priced in.
“Now, I’m not saying that every one of these ideas is better than anything data center related,” Cramer said. “If you diversify away from many things data center, I think the next two months will be a happier, more lucrative time for you.”
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