With AI stocks down, Jim Cramer says many not be worth the hype

CNBC’s Jim Cramer on Monday turned his attention to companies that have been touting their use of generative artificial intelligence. With many of these stocks seeing losses, Cramer suspects that some, with the exception of Nvidia, are not worth the hype.

But unlike other fad stocks — such as certain electric vehicle and cannabis companies — Cramer noted that the good news is many of these AI companies are highly profitable, so their stocks won’t completely collapse.

“But the bad news? Other than Nvidia and its acolytes, no company seems to have really harnessed AI for profit,” Cramer said. “Sure, they’re spending on it, but whenever I ask, ‘hey, what are you really making on AI,’ the answer is nothing.”

Cramer named Microsoft, Google, ServiceNow, Amazon, Cisco and Snowflake as stocks that could be winners someday. But for the most part, he said, even the “best of breed players” don’t seem to have a clear plan for their AI capabilities.

“Until someone can give me a genuine use case where generative AI actually saved a business money by cutting support staff or increasing the value of its knowledge workers, the mere mention of AI enough these days, it can send a stock cascading south,” Cramer said. “That’s just where we are in these dog days of August.”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia.