Cramer says he's warming back up to the AI trade, but not ready to act yet

Stocks fell Friday after Fed Chair Kevin Warsh’s Jackson Hole remarks, with inflation above target acknowledged but emphasis on not “telegraphing” future moves leaving markets a “jump ball.” CrowdStrike shares dropped more than 4% as investors took profits after its 20.5% rally, despite renewed urgency on cyber defense tied to an OpenAI co-signed call for action. Separately, the WSJ reported unions may withhold support for politicians opposing data center construction, prompting Cramer to temper AI infrastructure exposure (including trimming Broadcom and Corning) ahead of midterm elections.

Analysis

The cleanest read is not the macro tone, but the dispersion it creates: when the Fed is less explicit, quality software with visible demand and pricing power should outperform cyclicals that need a clean rate path. That favors CRWD on a 3-12 month horizon because security budgets are one of the last discretionary cuts and AI expands the attack surface, but the stock is likely digesting a sharp re-rating first. Near term, the move is more about positioning reset than fundamentals; if CRWD cannot hold post-earnings gains over the next 1-2 weeks, it becomes a better add on weakness than a chase.

AVGO and GLW are more interesting as sentiment-sensitive AI infrastructure proxies than as immediate fundamentals stories. The labor headline lowers the probability of a near-term political crackdown on data-center buildout, but it does not solve power, permitting, or community opposition; those bottlenecks still cap order acceleration over the next 6-18 months. That means the first derivative is bullish for suppliers, while the second derivative is that the market may be overpricing an uninterrupted capex cycle.

Contrarian view: consensus is treating the union signal as a broad green light for AI infrastructure, but the real constraint is grid and power availability, not campaign support. If that constraint remains binding, the best risk/reward may be in waiting for a better entry rather than rebuilding the whole complex now. The thesis is falsified if CRWD gives back the post-earnings breakout and if AVGO/GLW fail to see order commentary or book-to-bill improvement over the next 1-2 quarters.

Key Decisions for Investors

• CRWD: do not chase after the earnings pop; add only on a 5-8% pullback over the next 1-3 weeks if post-earnings support holds. Risk/reward is better into consolidation than after a 20%+ move.
• AVGO: tactical long on weakness for a 1-3 month trade if the market keeps pricing a friendlier data-center policy backdrop; use a tight stop if AI-capex sentiment rolls over or the stock loses its post-news support.
• GLW: keep as a watchlist beneficiary of any renewed AI buildout, but require evidence of orders/guide-through before rebuilding. If no improvement by the next earnings cycle, the data-center theme is likely a sentiment trade rather than a durable fundamental inflection.
• Pair trade idea: long CRWD / short a basket of overextended AI infrastructure names on a 1-3 month horizon, betting cyber spending proves more durable than politically driven capex enthusiasm. Cover if AI infra names start showing accelerating order growth.
• Alert level: if AVGO and GLW both underperform the market by ~5% over the next month despite positive AI headlines, assume the market is still discounting power/permitting constraints and reduce exposure.