Jim Cramer argues that the market is still being underappreciated because real earnings power in AI, semicap equipment, and selected “obvious” winners is overriding bubble fears. He highlights Snowflake’s post-earnings surge, Applied Materials’ AI-driven capex cycle, Hinge Health’s strong unit economics, and Larry Williams’ contrarian bullish bond/cycle view as evidence that the tape still has room to run.
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Cramer’s core thesis is that this market is not being driven by a speculative fantasy but by a real, broadening AI buildout and by companies that are translating that buildout into earnings and cash flow. He opens with Snowflake’s huge post-earnings move as proof that investors can still capture major gains if they focus on what is working. In his telling, Snowflake’s pivot from plain software to AI-enabled software, plus partnerships with Anthropic, OpenAI, and Amazon Web Services, shows that the company “understands the transition to AI.” He uses that as a springboard to argue that the market’s “needle in a haystack” opportunities are visible if investors are paying attention. He then widens the frame beyond software into the defense-drone theme, arguing that Ukraine’s cheap-drone tactics and the Pentagon’s interest in similar capabilities create a real emerging investment lane. …
Tactically, the tape still favors AI and event-driven winners, with Snowflake and Applied Materials reinforcing that buyers are paying for earnings delivery. The near-term risk is that crowded winners stall if the market stops rewarding obvious themes or if yields jump again.
Over the next few months, the base case is continued leadership from semicap equipment, AI infrastructure, and select software if capex and guidance stay strong. That view weakens if the AI spend cycle decelerates or if rising rates overwhelm earnings momentum.
Structurally, this looks like an AI investment regime built on real capex, supply-chain bottlenecks, and profitable enablers rather than the late-1990s internet bubble. If that regime persists, equipment makers, infrastructure names, and productized healthcare platforms could stay in favor for an extended period.
Snowflake’s 36% post-quarter surge shows that AI-transition winners can still deliver huge gains.
Cramer uses the stock’s move as evidence that the market is still rewarding AI transformation stories.
Snowflake’s partnerships with Anthropic, OpenAI, and AWS demonstrate a successful pivot from software-only to AI-enabled software.
The company’s ecosystem is framed as direct proof of adaptation to AI demand.
Government interest in drone companies could broaden beyond Unusual Machines to a field bet across the group.
Cramer suggests the theme is early and specific winners have not yet been chosen.
Is this maybe one of the greatest times in the history of your industry?
Gary Dickerson says it absolutely is the greatest time in the history of the industry and for Applied Materials. AI is driving incredible computing demand, they just delivered record earnings and record revenue, and this inflection will go on for a very long time. Applied Materials is the clear leader in the fastest-growing areas of AI including leading edge foundry logic, DRAM, and advanced packaging.
You actually had to change your structure of deals — it can't be boom bust because you're not doing the same subcontracts you used to do, right?
Dickerson confirms they have unprecedented visibility into their business. Customer conversations with CEOs are focused on Applied Materials' ability to deliver equipment and key innovations for AI computing. Token demand has increased 3x in the last few months and innovation in tokens per second per watt is what everyone is focused on.
People keep saying it can't last and that PE will start turning out more and more and reach equilibrium — but your factories are going 24/7 and you're nowhere near able to meet demand, right?
Dickerson confirms they have made big investments to double operational capacity but also must invest in the supply chain. They have unprecedented visibility with customers at least eight quarters into the future. Agentic AI is layering on top of all the existing AI demand, and CPUs, DRAM are seeing big increases where Applied Materials is the leader.
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