Jim Cramer Makes the Case for AI Data Center Stocks
CNBC reported Sunday that CNBC host Jim Cramer is pushing back against the notion that AI data center stocks have already run too far for new buyers to enter.
Cramer Points to Memory Supercycle as Entry Opportunity
Writing in his Sunday column for Investing Club subscribers, Cramer highlighted the Roundhill Memory ETF as a compelling vehicle. The fund pulled in more than $5 billion over a single month, including $1.1 billion in one Thursday session alone.
Despite that surge in inflows, Cramer argued the underlying holdings remain attractive. The ETF holds names including Micron, SK Hynix, Samsung, Seagate, and Western Digital. He described the combination as a rare concentration of high-demand exposure, particularly given AI computing’s relentless appetite for memory capacity.
His core argument rests on pricing power. Cramer said memory customers effectively cannot refuse to pay higher prices given how central these chips are to AI workloads. That dynamic, he suggested, means recent buyers were not reckless but rather disciplined.
Micron Valuation Makes the Case
Cramer zeroed in on Micron as a standout value. The chipmaker’s stock surged roughly 38% in a single week, moving from around $542 to $747 per share. That kind of move would normally signal a stock to avoid.
Yet Cramer noted Micron trades at just nine times forward earnings, per FactSet data. Given the company’s ability to raise prices on its high-bandwidth memory chips, he argued the multiple could compress further as earnings rise.
He referenced analyst Ben Reitzes of Melius Research, who initiated coverage of Micron and Sandisk with buy ratings in late April. Investors who acted on that call captured roughly a 50% gain in just weeks.
Background: Wall Street Chases the Data Center Build-Out
The memory supercycle narrative has gathered momentum as hyperscalers pour capital into AI infrastructure. Cooling and power management suppliers have also rallied sharply. Companies such as Vertiv and Eaton have become well-known Cramer favorites in the data center supply chain.
In his Sunday note, he flagged a lesser-known name in the space. Modine Manufacturing, a heating and cooling specialist, has reportedly cultivated deep ties with major cloud providers. Cramer said Modine resembles Vertiv and Eaton but remains less widely followed by investors, making it potentially more attractive on a relative basis.
Materials Plays Round Out the Picture
Cramer also pointed to what he called sleeper-cell memory plays. Firms that supply materials needed to convert silicon wafers into chips, such as Qnity, a recent DuPont spinoff, offer indirect exposure to the same demand surge. He acknowledged these tertiary names carry more complexity but argued their earnings multiples remain similarly undemanding.
The broader message was consistent throughout. Cheap valuations, structural AI demand, and still-limited mainstream coverage of several names suggest the rally has further to go.
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