Wall Street’s ‘Fixation’ on High-Valuation Tech and Speculative AI Stocks is Hiding Value

Wall Street is currently grappling with renewed volatility, and according to CNBC’s Jim Cramer, the cause is not a fundamental flaw in the economy—it’s a dangerous fixation on the highest-priced stocks.

Cramer points to a fractured market, segmented into a booming, earnings-driven AI and Data Centers economy, a struggling ‘so-called real economy’ that desperately needs rate relief, and a frothy, speculative corner he chillingly compares to the “final stages of the dot-com bubble.”

This week’s steep market selloff, which saw major indices tumble, was, in Cramer’s view, a psychological event, not an economic one.

He highlighted the market’s reaction to Palantir: the stock plummeted despite beating earnings estimates. This, he says, is proof that money managers are letting the valuation concerns of a few stocks cloud their judgment about the entire asset class.

Cramer emphasized that while the “Magnificent Seven” tech giants may justify their premiums with impressive growth, the same cannot be said for the true speculative stocks—those trading on hype with little or no path to profitability.

The current panic, he concludes, is creating an opportunity for smart money to look past the AI stocks froth and invest in quality companies with solid fundamentals. In a volatile market, Jim Cramer’s message is simple: invest in earnings, not just expectations.