Cramer Says Higher Rates Are Splitting the Market, With AI Stocks Holding an Edge

Speaking on CNBC's “Mad Money,” Cramer said Wednesday's 10-year Treasury note auction reminded him of his hedge fund days, when investors waited for government bond sale results before buying stocks because a poorly received auction could push rates higher and equities lower. The $39 billion auction drew strong demand and helped bring Treasury yields off their multidecade highs earlier in the day. Stocks still ended lower after the benchmark 10-year yield briefly climbed to 5.365%, its highest level since April 2002. Cramer said the market's renewed focus on Treasury auctions shows how much borrowing costs matter for stocks.

“Any market where you need to wait to see the results of a Treasury auction is simply not as good as a market where you don't care about them,” Cramer said. “Every time you add a new variable into the equation, it makes owning stocks tougher.”

Higher rates can ripple across much of the economy. Cramer pointed to finance, housing, utilities, entertainment, retail, autos and industrials as sectors where companies or their customers depend heavily on credit. AI-related companies appear to play by different rules, he said. Data center builders, semiconductor companies, power providers and cybersecurity firms are far less constrained because lenders remain eager to finance their growth, according to Cramer. That also helps explain why the stock market has lately been so narrow, with AI stocks leading the S&P 500 back to record highs this week.

“They seem to be able to borrow at their leisure,” Cramer said. “They're crowding out other borrowers with their demand for money.”

SpaceX is one example. According to a Financial Times report, Elon Musk's rocket and AI company is looking to borrow $40 billion to buy Nvidia chips for data centers and sell the resulting computing power, as it already does with Alphabet's Google and Anthropic. Despite SpaceX's BBB credit rating and the size of the potential borrowing, Cramer expects it could secure relatively attractive terms because of enthusiasm around AI. “If it were any non-data center related company, its [borrowing] rate would skyrocket,” Cramer said. “Not the data centers, though.”

He contrasted that with the newly named Skydance, which recently issued a similar amount of debt as part of its acquisition of Warner Bros. Discovery. The bonds quickly fell as investors weighed challenges facing the economically sensitive movie and television businesses, including cord cutting and advertising pressure.

The contrast underscores Cramer's larger point: traditional companies remain vulnerable to higher borrowing costs, while AI businesses are largely escaping those same credit concerns. The bifurcation has been showing up in the stock market, with Cramer calling AI stocks “sainted” names. “The AI data center stocks, aside from maybe Oracle, have nothing to do with what price the Federal government borrows at,” Cramer said. “They only have to do with a future that's considered so bright that it obscures any problems, any bumps, even any pimples. The rest of corporate America should be so lucky.”