Cramer Warns AI Rally Overlooks Three Debt-Fueled Risks

Jim Cramer has cautioned that the two-day surge in AI stocks does not signal an all-clear for the data-center sector. He highlighted three lingering threats that the rebound has not addressed.

One of those three risks is the $63 billion Anthropic financing that fueled Tuesday's gains. Earlier in the day, Cramer praised the same deal on X. By the evening broadcast, he was raising concerns about the borrowed money behind it.

Why the Deal Driving the AI Rally Landed on Cramer's Radar

Lenders including Blackstone and Bank of America are backing the Broadcom-arranged chip financing through a special purpose vehicle (SPV) created solely for this transaction. Anthropic will lease the hardware from the SPV, which is purchasing Broadcom's chips and networking equipment, with deliveries scheduled to begin in 2027.

On X, Cramer described the arrangement as "excellent for all involved." During his Mad Money program, he emphasized that Anthropic is acquiring Broadcom's gear using debt rather than its own earnings.

"People don’t seem to grasp that [Anthropic] got the money in the Broadcom-arranged financing deal to purchase equipment from Broadcom," he said.

Broadcom has also agreed to absorb some of the lenders' risk through a mechanism called residual value support, according to Bloomberg. Under this setup, the chipmaker covers part of the shortfall if the leased hardware depreciates.

Can Neoclouds Continue Borrowing if the Fed Raises Rates Again?

Cramer's other two risks also relate to the cost of debt. Neoclouds — smaller companies that rent out AI computing capacity — have taken on substantial debt to construct data centers.

He singled out CoreWeave, Nebius, and Iren. CoreWeave shares gained nearly 8% on Tuesday, yet its bonds have yielded as much as 15%.

"I have learned that after every positive story about anything in the data center, there will be a plethora of negative stories about something wrong, including CoreWeave," he added.

Bond markets provided some relief on the same day. Oil prices declined, and the 10-year Treasury yield dipped below 5%.

Cramer warned that the relief may be temporary. The Federal Reserve decides on rates Wednesday, and Morgan Stanley's Michael Gapen expects policymakers to hold steady while hinting at future increases.

Next week's midterm elections and potential Middle East tensions could contribute further volatility.

Cramer still describes himself as an "unabashed believer in the AI build-out." Banks and private lenders are playing an increasing role in financing it, and chipmakers such as Broadcom now backstop part of that debt. For the most indebted names, like CoreWeave, Warsh's guidance at 2:30 p.m. ET represents the next test of their borrowing costs.