CNBC’s Jim Cramer on Friday said the generative artificial intelligence craze is only beginning, adding that stocks associated with AI have more room to run even after this week’s huge gains.
Amazon CEO Andy Jassy told Cramer this week that generative AI will make his company’s web services tens of billions of dollars in the future as enterprises switch from computing on premises to the cloud. To Cramer, this theory suggests any pullback in AI stocks will just incentivize buyers.
“The AI stocks may have room, maybe a lot of room to run, even though they were up big this week,” Cramer said. “If, as Amazon CEO Andy Jassy told me, 90% of software is still on prem, not the cloud where ChatGPT lives, then I think any dip will indeed be met with buying, not selling, because the wonderment and astonishment, people, is just getting started, and what humongous trend ever stops when it’s only one year old?”
According to Cramer, generative AI is “anything but a cheap sleight of hand,” and will change the way people do their jobs and approach challenges.
Microsoft stands out as a leader in the AI space, in part because it owns half of OpenAI, the company behind ChatGPT, which brought this new technology into the mainstream. Unlike some of its peers, Microsoft is seeing tangible profits from its AI venture Co-pilot, Cramer said.
In addition to Amazon and Microsoft, Cramer also highlighted Nvidia as a big name in AI. He said the company’s CEO, Jensen Huang, was prepared for the AI craze. Well before ChatGPT went viral, Huang demonstrated the power of generative AI for Cramer, using the new technology to create a seascape work in the style of post-impressionist painter Paul Cézanne at Cramer’s request.
“The cynics say that the AI moves, it’s just too big already,” Cramer said. “I can tell you from my face-to-face talks with people in Seattle, this move’s just getting started.”
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Amazon, Nvidia and Microsoft.
Eugen Boglaru is an AI aficionado covering the fascinating and rapidly advancing field of Artificial Intelligence. From machine learning breakthroughs to ethical considerations, Eugen provides readers with a deep dive into the world of AI, demystifying complex concepts and exploring the transformative impact of intelligent technologies.