Home / Business and Economy / Cramer Declares End of "Magical Investing" Era as AI Hype Fades
Cramer Declares End of "Magical Investing" Era as AI Hype Fades
14 Nov
Summary
- Cramer warns investors to stop chasing "big dreams over solid earnings"
- AI boom compared to late-1990s dot-com bubble, with massive valuations and thin profits
- OpenAI's valuation skyrocketed from $29B to $300B despite low $13B in sales
In November 2025, Jim Cramer officially declared the end of what he dubbed the "Year of Magical Investing." Cramer, known for his blunt assessments, warned that investors have been chasing big dreams over solid earnings, piling into AI moonshots and "future maybe" stories while ignoring bottom-line numbers.
For nearly two years, the market has been fueled by this fantasy phase, with investors treating equity like promises and companies like OpenAI seeing their valuations skyrocket despite thin profits. Goldman Sachs recently compared the AI boom to the late-1990s dot-com bubble, highlighting Big Tech's eye-popping $349 billion in planned 2025 capital expenditures despite lagging profits.
Cramer's frustration boils down to the fact that investors have essentially stopped checking the math. OpenAI's valuation has surged from $29 billion in early 2023 to $300 billion by late 2025, despite only $13 billion in annualized sales. Cramer sees this as a clear case of "future promise" being baked into the valuation, and he's not buying it.
As Wall Street remains in "full party mode," Cramer is preaching caution, warning that the era of magical thinking that has fueled the AI boom is coming to an end. He believes it's time for investors to separate the vision from current viability and face the market's new reality.
