Amidst recent stock market fluctuations, financial commentator Jim Cramer has taken to social media to address what he sees as misleading headlines regarding artificial intelligence (AI) losses.
Cramer’s message is clear: the tech giants, often referred to as ‘hyperscalers,’ are not signaling worsening AI performance. Instead, he argues, they are thriving through AI advancements. This clarification comes after both Microsoft (MSFT) and Meta Platforms (META) saw their stocks dip following earnings reports. While Microsoft dropped 3.95% in premarket trading and Meta shed 2.69%, Cramer believes this decline is a result of sensationalized reporting rather than a reflection of AI struggles.
He criticizes a lack of rigor in some news reports, urging investors to go beyond the headlines and dive into the actual earnings calls and analyses. “The Hyperscalers are NOT warning about worsening AI losses, they are talking about crushing it with AI,” he declares. Cramer encourages his followers to read the transcripts from the earnings calls and his team’s analyses for a more nuanced understanding of the situation.
This sentiment echoes that of analyst Zev Fima, who recently increased the price target for Meta to $650 per share despite the recent stock decline. Fima highlighted the robust third-quarter results, with revenue guidance for the current quarter exceeding expectations. This positive outlook suggests that Meta’s AI investments, including the development of its Llama 4 model, are indeed yielding strong results.
Meanwhile, Microsoft has announced that its AI business is on track to reach a $10 billion revenue milestone, making it the fastest-growing segment in the company’s history. CEO Satya Nadella emphasizes the transformative impact of AI across various business processes, highlighting the company’s commitment to this technology.
Meta is also pushing forward with its AI initiatives. CEO Mark Zuckerberg points to the significant scale of their AI training efforts, which are expected to lead to tangible results by early 2025. These developments suggest that both companies are investing heavily in AI and expect it to continue driving growth in the coming years.
Cramer’s message underscores the importance of critical thinking and a nuanced understanding of the complexities of AI development and its impact on the tech industry. It serves as a reminder that headlines alone may not provide a complete picture and that investors should seek out deeper insights to form informed decisions.
