Jim Cramer explains why he’s still optimistic on data center buildout

As the hype around stocks related to the data center starts to die down on Wall Street, CNBC’s Jim Cramer explained why he’s hopeful the artificial intelligence infrastructure theme still holds weight.

“When it comes to AI infrastructure, Wall Street’s become very skeptical, and I don’t think that’s really changed,” Cramer said. “But looking at what we’ve seen so far this earnings season, I’m feeling much more sanguine about this story, especially if we get some more trade war…de-escalation from the White House and stocks stay as cheap as they are.”

At the start of the year, investors grew concerned the AI boom would turn bust after learning that Chinese startup DeepSeek developed a large language model that is purportedly as advanced as the dominant competitors, but requires much less energy and money. The revelation from DeepSeek triggered a drastic shift in the tone of the market and sent down AI stocks that had seen immense gains for the better part of a year — including AI darling Nvidia, which set a record by losing nearly $600 billion in a single session. AI stocks and other former market leaders have also declined more recently as Wall Street worries broadly about the economic impact of President Donald Trump’s sweeping tariff policies and the potential for a recession.

But according to Cramer, there hasn’t yet been any concrete evidence to suggest a slowdown in AI infrastructure buildout. He pointed out that on Thursday, executives from Amazon and Nvidia denied that data center spend was on the decline. While Microsoft has pulled back on some early stage projects, Cramer claimed the company may just be starting to build fewer data centers on behalf of partner OpenAI as the startup begins to raise its own cash.

Cramer was also encouraged by strong earnings results so far this season for companies connected to the data center. He mentioned that Vertiv, which makes power and cooling equipment for the data center, easily topped estimates. GE Vernova also managed a substantial beat, he continued. The power company indicated that strong demand for data centers is driving gas turbine sales as well as boosting its nuclear business.

Cramer named stocks in several sectors related to AI buildout: semiconductor companies, data center builders, outfits responsible for servers and networking equipment, power utilities, climate control businesses as well as industrials. If the data center theme is still strong, he said it might be good to own names including Broadcom, Arm Holdings, CoreWeave, Arista Networks, Cisco Systems, Constellation Energy, Vistra, Carrier Global, Trane Technologies, Cummins and Dover.

“These are very much cyclical companies, so you can’t just buy them if you think we’re headed into a recession,” he said. “But if we get a reprieve on some of…these tariff issues and investors return to the AI trade, I just gave you everything that’s going to fly again.”

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Disclaimer The CNBC Investing Club holds shares of Nvidia, Broadco and Amazon.