Cramer Rejects AI Bubble Calls as S&P 500 Trades Near 20 Times Earnings
Updated
Updated · CNBC · Jul 14
Cramer Rejects AI Bubble Calls as S&P 500 Trades Near 20 Times Earnings
3 articles · Updated · CNBC · Jul 14
Summary
Jim Cramer said the current AI-driven rally looks nothing like the dot-com bubble, arguing market froth is limited to outliers rather than the stocks most investors own.
About 20 times forward earnings for the S&P 500, versus more than 25 times heading into 2000, is central to his case that valuations are elevated but not bubble-like.
Tuesday's cooler-than-expected CPI also underpins that view, Cramer said, because a dot-com-style crash would likely require aggressive rate hikes that he does not see coming from the Fed.
Big-cap financials and tech names further weaken the bubble argument, he said, citing Bank of America, Goldman Sachs and JPMorgan at roughly 12 to 18 times earnings, with SK Hynix at about 4 times 2027 estimates and Micron at 6.