Cramer: AI stocks still have downside, but this isn't 2000 again

The AI trade is not done bleeding, according to Jim Cramer, but he wants investors to keep their heads. The CNBC host told viewers Thursday that the sell-off hammering artificial-intelligence stocks has more room to run, while insisting this is not the dot-com bust all over again.

Thursday's damage was brutal. Micron tumbled 17%, GE Vernova dropped 7% and Sandisk plunged 22%, and all three had already been mauled in Wednesday's session. The trigger: growing pushback against new data centers after the midterm elections, which has cast doubt on the money set to flow into AI infrastructure.

Cramer didn't sugarcoat the chart. Speaking on Mad Money, he said he wished he could call the day's flush the bottom, then admitted there is probably more downside ahead. He pointed out that plenty of tech names, semiconductors especially, have no visible support left because they ran so hard on the way up.

What separates this from 2000, in his view, is the underlying businesses. Cramer called the decline orderly because today's AI players are mostly lucrative companies whose stocks simply climbed too high, unlike the speculative outfits that vaporized in the dot-com era. Investors, he said, wrongly assumed data center construction would sprint ahead indefinitely.

His biggest worry is the smaller neocloud developers — CoreWeave, Iren and Nebius — which borrowed heavily to bankroll projects that could now get tangled in regulatory delays. Cramer said the debt tied to those companies is the real problem, though he noted nobody of significance is currently defaulting, which he argued is not enough to sink the broader market.

Cramer added that he would rather see the market rip the Band-Aid off quickly than drag the pain out. He recommended holding enough cash to stay level-headed, and flagged falling interest rates, signs of easing inflation and the possibility of an end to the Iran war as reasons for optimism down the road.