CNBC’s Jim Cramer warned Wednesday that a wave of capital raises tied to the artificial intelligence boom could create a near-term headwind for stocks.
“Bull markets can be killed by business conditions or interest rates or geopolitical turmoil, but the thing that most easily leads them to the slaughterhouse is an excess of new supply,” the “Mad Money” host said. “Like any market, when supply outstrips demand, prices go right down.”
Cramer pointed to a growing pipeline of companies are seeking capital to fund massive AI infrastructure buildouts, including highly anticipated IPOs from SpaceX, Anthropic and OpenAI, as well as Alphabet’s recent $80 billion stock sale. While Alphabet’s deal was absorbed smoothly by the market, Cramer worries the market could eventually become saturated if too many companies attempt to tap shareholders at the same time.
“I get concerned that stock supply will overwhelm investor demand,” he said. “Right now, looking at the calendar, I don’t know how we are going to afford all of these deals without taking the market lower. It’s too much capital at once.”
According to Cramer, the biggest risk is that investors will need to sell existing winners to fund the next generation of AI offerings. He suggested that dynamic may already be weighing on Nvidia, a holding in Cramer’s Charitable Trust, the portfolio run by the CNBC Investing Club.
“Nvidia’s looking like the biggest piggy bank in the world,” he said.
The stock dropped 3.6% during Wednesday’s session.
Despite the near-term pressure, Cramer said the underlying AI investment thesis remains intact.
“Once we get through this period and we see that the buyers of Nvidia’s wares are making a ton of money, we are home free,” he said. “Until then, it’s a battlefield and you better don your armor.”
Jim Cramer’s Guide to Investing
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.Jim Cramer warns excess supply could be the next biggest threat to the bull market NYT News Today.
Hence then, the article about jim cramer warns excess supply could be the next biggest threat to the bull market was published today ( ) and is available on NY Times News ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Jim Cramer warns excess supply could be the next biggest threat to the bull market )
Also on site :
- Marjorie Taylor Greene: UFC fights don't belong on White House lawn
- 1981 Arena Rock Classic, Ranked Among 'Greatest Songs of the '80s,' Became an Instantly Recognizable Party Anthem
- Hamas Spokesperson: We place higher interest of our people at core of our political & diplomatic efforts