CNBC’s Jim Cramer said on Wednesday that investors should stop treating the stock market like a winner-take-all game.
“There’s room for many companies at each step of the AI food chain. It’s not kill or be killed,” the “Mad Money” host said. “The best stocks often belong to companies that have plenty of competition, simply because there’s plenty of business to go around.”
Shares of AMD fell 6% Wednesday, despite a solid earnings report, after Elon Musk said SpaceX will build its artificial intelligence infrastructure “exclusively on Nvidia” because it believes the Vera Rubin architecture is “the best AI computer.” Cramer said the market’s reaction reflected Wall Street’s tendency to treat AI as a winner-take-all race, even though demand is large enough to support multiple winners.
“There may be trillions of dollars in CPU and GPU demand by 2030,” he said. “If you think Nvidia can capture all of that business by itself, all I can say is what are you smoking?”
Cramer said AMD has built a strong graphics processing unit (GPU) business to compete with Nvidia, while also developing a leading central processing unit (CPU) franchise that regularly takes share from Intel. Rather than viewing those companies as mutually exclusive investments, he says all three stand to benefit from the rapid growth in artificial intelligence infrastructure. Cramer’s Charitable Trust, the portfolio run by CNBC’s Investing Club, owns shares of Nvidia and Intel.
“Intel, AMD, Nvidia, all three are terrific,” he said. “Any of them can be bought, because the opportunity that lies ahead is so massive.”
He said the same principle extends beyond semiconductors. In retail, Cramer said investors have historically treated TJX, Burlington, and Ross Stores as though only one could succeed, despite all three producing strong long-term returns. Cramer’s Charitable Trust owns shares of TJX. He also pointed to cybersecurity, where both CrowdStrike and Palo Alto Networks continue to benefit from growing demand, which is why Cramer’s Charitable Trust owns shares of both.
“Sure, there are some genuinely zero-sum situations, viciously competitive industries where demand is limited,” Cramer said. “But these are the opposite: big opportunities with lots of room for multiple winners.”
