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CNBC’s Jim Cramer on Tuesday outlined a simple framework to make sense of the current market, as the threat of artificial intelligence disruption looms over industries from software to commercial real estate.
“We want companies that make things and do stuff that we can understand. We want to avoid stuff we can’t or don’t comprehend, because if you can’t get your head around it, then it’s probably the kind of stock that Anthropic ... can wreck with a simple press release,” Cramer said on “Mad Money,” referencing the AI startup behind the Claude chatbot. Anthropic has announced a tear of new industry-specific AI tools in recent weeks, often accompanied by sell-offs in stocks in those domains.
“Suddenly, once unassailable companies with great moats seem like they might be worth nothing — yes, nothing,” Cramer said. “Maybe these software stocks can have periodic bounces, but if you don’t know what they do, if you don’t know what they make, if you can’t explain the business to someone else, you can’t own it.”
Cramer’s comments on Tuesday came after a recovery day for Wall Street in which all three major U.S. indexes finished the day higher. With increased attention on the concept of “HALO” stocks — heavy assets, low obsolesce — Cramer said he was trying to put an even finer point on what this fragile market is looking for in minting winners.
