Jim Cramer Highlights Three Risks Associated with Recent AI Stock Rally

Jim Cramer stated that the two-day AI stock rally does not provide grounds to believe that the data center sector's problems are resolved, and he identified three risks that the growth did not eliminate.

Deal with Anthropic

One of the risks is the $63 billion deal behind Tuesday's growth. Creditors, including Blackstone and Bank of America, are financing the purchase of chips organized by Broadcom through a special purpose vehicle created solely for this deal. Anthropic will lease equipment from this company, which buys chips and networking equipment from Broadcom; deliveries are expected from 2027.

On X, Cramer called the scheme "great for all participants." On Mad Money, he emphasized that Anthropic is buying Broadcom equipment with borrowed money, not its own profit. "People seem to not understand that [Anthropic] received funds through financing organized by Broadcom to buy equipment from Broadcom," he said.

According to Bloomberg, Broadcom also agreed to cover part of the creditors' risk through a residual value support mechanism: in such deals, the chip manufacturer assumes part of the shortfall if the leased equipment loses value.

Neocloud Debt

The other two risks also boil down to the cost of debt. Neoclouds, small companies renting out computing power for AI, have borrowed heavily to build data centers. Cramer mentioned CoreWeave, Nebius, and Iren. CoreWeave's shares rose almost 8% on Tuesday, but its bond yields reached 15%.

"I've learned: after every positive story about anything in data centers, there will be a lot of negative stories about something being wrong, including CoreWeave," he added.

On the same day, bond markets took a breather: oil prices fell, and the yield on 10-year Treasury notes dropped below 5%. Cramer warned that the calm might be short-lived. The Fed will decide on the rate on Wednesday, and Michael Gapen from Morgan Stanley expects the regulator to hold the rate but signal further hikes. Midterm elections next week and potential escalations in the Middle East could add volatility.

Cramer still calls himself an "avid supporter of building AI infrastructure." Banks and private creditors are playing a growing role in financing, and chip manufacturers like Broadcom now support part of this debt. For the most indebted companies, such as CoreWeave, the next test of borrowing costs will be Warsh's comments at 2:30 PM Eastern Time.