Cramer backs Meta spending plan as tech stocks split over AI flows
CNBC’s Jim Cramer defended Meta’s AI spending and said Honeywell Aerospace shares were nearing a level where his club may add.
By Sarah Jenkins · Chief Macro Economics Correspondent
· 3 min read
U.S. stocks advanced Thursday as Wall Street attempted to recover despite renewed U.S.-Iran tensions and firmer oil prices, according to CNBC’s Investing Club with Jim Cramer. The move masked a sharp split inside technology: Micron rose 7.5%, while Salesforce, a holding of Cramer’s charitable trust, fell 2.5% after KeyBanc cut its rating to hold from buy.
Cramer told Investing Club members that the divide reflected how capital is moving through the artificial intelligence buildout. In his view, companies selling hardware, memory and storage into large cloud operators are benefiting from spending plans, while the hyperscale technology companies funding those plans face investor pressure over the scale and timing of their outlays.
“The companies that receive checks from the hyperscalers, these are the Microns of the world or SanDisk, are doing well, and the companies that write the checks, the hyperscalers, are doing badly,” Cramer said, according to CNBC.
The club is also reviewing its semiconductor holdings with an eye toward concentrating exposure in the names where it has the highest conviction, CNBC said. Cramer identified Intel as his preferred holding within the club portfolio.
Meta, another charitable trust position, declined as investors questioned the pace of its artificial intelligence investment. CNBC said the Facebook and Instagram parent plans to start producing its own AI chip as part of a larger effort to expand computing capacity to 14 gigawatts next year, a signal that capital expenditure is not expected to ease soon.
That spending matters because large AI systems require data centers, chips, power capacity and networking infrastructure before they can generate revenue from new products or advertising tools. Investors often treat rising capital expenditure as a drag on near-term free cash flow, while management teams argue that capacity is needed to meet future demand.
Cramer framed Meta’s investment as a response to demand rather than a sign of overbuilding. He said he believed the company was looking at strong orders and investing to meet that need. He also said Meta had not explained its strategy clearly enough to investors, while maintaining his positive stance on the stock.
“I’m sticking with it,” Cramer said, according to CNBC. “I think that they’re doing a lot of things right, except for telling the story.”
Shares of Honeywell Aerospace, which CNBC said recently separated from Honeywell Technologies, fell another 2% on Thursday. Cramer said the weakness may reflect the trading instability that can follow a corporate spin-off rather than a deterioration in the aerospace business.
Spin-offs can trade unevenly after separation because investor bases shift, index eligibility can change and holders of the former parent may sell shares that no longer fit their mandates. Cramer said Honeywell Aerospace was nearing a price where he would consider adding to the club’s position.
CNBC said Thursday’s rapid-fire segment also covered PepsiCo and Levi Strauss. Cramer’s charitable trust is long Honeywell, Honeywell Aerospace, Intel, Meta and Salesforce, according to the Investing Club disclosure.
This story draws on original reporting from CNBC.
