Nov 6, 2026 · 44 min
Cramer warns data-center stocks face a tougher valuation test
'Mad Money w/ Jim Cramer 11/5/26
The sell-off raises a central question for technology investors: whether regulation, leverage and uncertain demand threaten growth expectations without destroying profitable businesses.
- 1Election uncertainty and potential data-center restrictions are pressuring high-multiple technology and infrastructure stocks.
- 2Cramer urges disciplined buying and cash preservation while questioning valuations for NVIDIA, Micron, AMD and speculative neocloud companies.
- 3Affirm, Airbnb and CUNITY illustrate stronger operating stories built on credit discipline, execution and diversified semiconductor demand.
Don't miss
Max Levchin explains how Affirm combines rapid growth and expanded guidance with attention to delinquencies, interest-bearing loans and consumer-friendly lending.
The brief
A sharp reversal from the prior day's rally puts election uncertainty and possible data-center restrictions at the center of a broader reckoning for technology stocks.
Cramer argues that today's profitable companies differ from the dot-com era, but leverage, debt and uncertain future demand still make high-multiple stocks vulnerable.
The valuation problem extends from NVIDIA, Micron and AMD to speculative neocloud companies, prompting Cramer to favor cash and cautious buying rather than aggressive dip-buying.
Affirm CEO Max Levchin makes the operating case for growth, pointing to revenue, profitability, raised guidance, card expansion, credit quality and a healthy holiday outlook.
Airbnb CEO Brian Chesky credits a rebuilt technology platform, faster development, AI-powered service and search, and improved pricing for accelerating growth and profitability.
The episode closes with CUNITY CEO John Kemp describing specialty materials serving smartphones, vehicles, satellites, factories and data centers, underscoring semiconductor demand beyond one market.
What was said on this episode
31 statements · 19 positive · 8 negative · 3 mixed · 1 neutral
Data centers will continue being built, but new restrictions will make construction harder.
“I don't think that's going to happen. Even as I know, it'll be harder to build them going forward.”
Listen at 2:52
Most non-speculative market stocks may outperform after the sell-off subsides.
“Now, when the smoke clears, I think it's their chance to shine.”
Listen at 3:35
Data center construction will remain substantial over the next two years.
“I think there still will be a lot of data center building, especially in the next two years.”
Listen at 4:45
New regulations will likely delay speculative neocloud data-center projects.
“Their projects will most likely be delayed by new regulations in the wake of the election.”
Listen at 4:55
Some neocloud companies will fail because of debt and regulatory pressure.
“Not all of these companies are going to make it.”
Listen at 5:09
Compute is highly valuable because artificial intelligence is used in business.
“And it's worth a ton of money in a world where artificial intelligence is a real part of business.”
Listen at 5:45
Anthropic’s planned public offering may not occur this month.
“Anthropic is supposed to come public this month, but now it seems fair to wonder if that's even possible.”
Listen at 6:43
“will the company really be worth the $2 trillion rumor that it was or $1.5 trillion or a trillion? I mean, what happens if it's less?”
Listen at 6:49
No significant data-center-related borrower is currently defaulting on debt.
“Right now, no one of significance is defaulting on their debt”
Listen at 7:24
Investors without cash should raise cash tomorrow.
“If you don't have some cash, I want you to raise some tomorrow.”
Listen at 8:59
Investors should sell some data-center-related holdings to raise cash.
“Take some losses in those data center related companies if you don't have enough cash”
Listen at 9:02
Investors should not add to technology stocks during the current bearish market.
“I don't think we need to add to any tech right now.”
Listen at 11:42
Buy data-center stocks without new regulations; avoid them if strict bans emerge.
“if the election results aren't met with a slew of new regulations, you probably should start buying these stocks pretty soon. But if tight regulations and bans are now going to surface throughout the country, you have to avoid them.”
Listen at 13:31
NVIDIA could have a strong 2027 while meeting current estimates.
“NVIDIA is going to have a good year in 2027 and just meet the current estimates that have been set out for the company”
Listen at 14:03
NVIDIA would look inexpensive at 70% growth and under 12 times forward earnings.
“you'd have a stock with a growth rate of 70 percent that's selling for less than 12 times next year's earnings.”
Listen at 14:09
NVIDIA below 12 times next year’s earnings will prove to be a bargain.
“I think NVIDIA at under 12 times next year's earnings is going to prove to be a bargain.”
Listen at 15:35
Neocloud companies may default on Micron take-or-pay contracts.
“Could they possibly default on them? Anything's possible.”
Listen at 16:04
Investors should buy AMD if its projected data-center market is accurate.
“If that's the case, then you can and should be buying her stock right now.”
Listen at 16:39
Affirm’s strong results warrant renewed investor attention.
“These results give investors a reason to take another look.”
Listen at 18:12
Affirm has been GAAP profitable for eight consecutive quarters.
“Also, eight straight quarters of being gap profitable.”
Listen at 18:40
Affirm’s quarter-over-quarter delinquency increase is seasonal, not concerning.
“No, that is a seasonal change.”
Listen at 21:06
Affirm expects a healthy holiday season for retail partners.
“I expect a healthy holiday season for our retail partners.”
Listen at 23:01
AI shopping agents may favor Affirm because it avoids certain consumer fees.
“Agents are really, really smart. They're going to read all the fine print. They're going to pick a firm even more because we don't charge any of those fees.”
Listen at 24:09
Airbnb’s AI-enabled software development generated hundreds of millions in incremental revenue.
“the code that we shipped probably generated, you know, hundreds and hundreds of millions of dollars of incremental revenue this year. So it's been so far very, very ROI positive.”
Listen at 28:22
Airbnb prices are generally lower than hotel prices.
“prices on Airbnb are much lower relative to hotels.”
Listen at 29:05
Airbnb dynamic pricing lowers average prices while increasing host earnings.
“generally the average prices on me come down and hosts make more money.”
Listen at 32:38
Airbnb is gaining market share despite a stagnant or stable travel economy.
“right now the travel economy is kind of stagnant or stable, but Airbnb is definitely taking share.”
Listen at 33:20
Investors should buy Lam Research cautiously and only a quarter position initially.
“as much as I like that stock, if I had to buy 100 shares, I would only buy 25 of it tomorrow. And then I'd wait.”
Listen at 36:08
DuPont is preferable to Xylem for water purification.
“I think DuPont's better water purification. I really do. I think that Xylem is not as good as DuPont.”
Listen at 36:35
NextPower is the preferred green-energy investment after its decline.
“Next Power is the way to play it, and the stock was down very badly today, and that's a good opportunity.”
Listen at 37:04
Cramer will not buy Vertiv until its stock falls substantially.
“I don't want to buy a stock that's up for the year that's in the data center. I want it to come down a lot”
Listen at 37:55
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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