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Cramer Declares AI's 'Magical Investing' Era Over, Pivots to These 4 Dividend Plays

MarketDash Editorial Team
10 days ago
CNBC's Jim Cramer is backing away from AI and data center stocks after spotting troubling insider activity. His new focus? Dividend-paying stalwarts that can weather market turbulence, including off-price retail, energy infrastructure, and consumer goods giants.

Remember when every AI-adjacent stock felt like printing money? CNBC's Jim Cramer says that party is officially over, and he's spotted the warning signs that convinced him to bail.

Cramer has grown increasingly cautious toward AI and data center stocks after noticing a surge in insider selling and borrowing activity—the kind of moves that typically signal executives don't love where their own stock is headed. The host who had previously dubbed 2025 the year to cash in on data center investments has completely flipped his position.

"I pronounced it over, dead," he declared on a recent broadcast.

So what's an investor supposed to do when the AI hype train derails? Cramer's pivoting hard toward dividend stocks outside the tech sphere, hunting for companies that can deliver steady returns even when markets get ugly. Here's where he's putting his confidence now.

TJX Companies

When a viewer called in asking whether he should worry about off-price retailer TJX Companies Inc. (TJX), Cramer didn't just recommend holding—he was emphatic about it. In his view, this is exactly the kind of stock that thrives when everything else is falling apart.

"TJX is really really strong," Cramer said. "It's what works in a bad market and right now we got a bad one. I say own TJX, not sell it."

The stock offers a dividend yield around 1.2% and has climbed 21% year-to-date, suggesting the market agrees with his assessment that discount retailers do just fine when consumers get budget-conscious.

Energy Transfer

For investors chasing higher yields, Cramer is pointing toward midstream energy company Energy Transfer LP (ET), which is offering a substantial 7.8% dividend yield. The stock has taken a beating this year, down 13%, and the company recently missed Wall Street's Q3 expectations. But Cramer sees that weakness as an opportunity.

"Don't wonder, buy," Cramer said in a recent program. "I mean, that thing is, that's just the sweet spot that we want to be in."

Energy infrastructure companies like Energy Transfer collect fees on moving oil and gas around, which tends to generate steady cash flows regardless of commodity price swings—the kind of boring reliability that suddenly looks appealing when tech stocks are cratering.

Procter & Gamble

Consumer packaged goods giant Procter & Gamble (PG) represents Cramer's blueprint for making money in any market environment. The company behind Tide, Crest, and dozens of other household staples offers a 2.85% yield and the kind of predictable business model that doesn't depend on anyone's vision of the future.

"I use Procter & Gamble on how to make money in any market, because the company is so rigorous and inventive," he explained. "Procter yields 2.85% and you know it has the scale and the science to make things cheaper."

People still need toothpaste and detergent when the stock market tanks, which is basically the entire pitch for owning consumer staples during turbulent times.

Johnson & Johnson

Cramer expressed particular enthusiasm for Johnson & Johnson (JNJ) earlier this month, highlighting the FDA's approval of its Caplyta drug for treating major depressive disorder in adults. He sees the healthcare giant as willing to tackle complex medical challenges that competitors avoid.

"They are tackling things that no one else even wants to go after," Cramer said.

In another segment, he grouped Johnson & Johnson with Amgen Inc. (AMGN) as dividend plays worth owning, noting both offer yields exceeding 2.7%.

"I think you'd do very well with owning Johnson & Johnson or Amgen," he said. "They both have yields more than 2.7%."

The broader message is clear: Cramer thinks the easy money phase of AI investing has ended, and investors need to get comfortable with companies that generate actual cash and return it to shareholders. Whether he's right about AI's trajectory remains to be seen, but his pivot toward defensive dividend payers reflects a noticeably more cautious market outlook than the enthusiasm that dominated much of the past two years.

Back to News

Cramer Declares AI's 'Magical Investing' Era Over, Pivots to These 4 Dividend Plays

MarketDash Editorial Team
10 days ago
CNBC's Jim Cramer is backing away from AI and data center stocks after spotting troubling insider activity. His new focus? Dividend-paying stalwarts that can weather market turbulence, including off-price retail, energy infrastructure, and consumer goods giants.

Remember when every AI-adjacent stock felt like printing money? CNBC's Jim Cramer says that party is officially over, and he's spotted the warning signs that convinced him to bail.

Cramer has grown increasingly cautious toward AI and data center stocks after noticing a surge in insider selling and borrowing activity—the kind of moves that typically signal executives don't love where their own stock is headed. The host who had previously dubbed 2025 the year to cash in on data center investments has completely flipped his position.

"I pronounced it over, dead," he declared on a recent broadcast.

So what's an investor supposed to do when the AI hype train derails? Cramer's pivoting hard toward dividend stocks outside the tech sphere, hunting for companies that can deliver steady returns even when markets get ugly. Here's where he's putting his confidence now.

TJX Companies

When a viewer called in asking whether he should worry about off-price retailer TJX Companies Inc. (TJX), Cramer didn't just recommend holding—he was emphatic about it. In his view, this is exactly the kind of stock that thrives when everything else is falling apart.

"TJX is really really strong," Cramer said. "It's what works in a bad market and right now we got a bad one. I say own TJX, not sell it."

The stock offers a dividend yield around 1.2% and has climbed 21% year-to-date, suggesting the market agrees with his assessment that discount retailers do just fine when consumers get budget-conscious.

Energy Transfer

For investors chasing higher yields, Cramer is pointing toward midstream energy company Energy Transfer LP (ET), which is offering a substantial 7.8% dividend yield. The stock has taken a beating this year, down 13%, and the company recently missed Wall Street's Q3 expectations. But Cramer sees that weakness as an opportunity.

"Don't wonder, buy," Cramer said in a recent program. "I mean, that thing is, that's just the sweet spot that we want to be in."

Energy infrastructure companies like Energy Transfer collect fees on moving oil and gas around, which tends to generate steady cash flows regardless of commodity price swings—the kind of boring reliability that suddenly looks appealing when tech stocks are cratering.

Procter & Gamble

Consumer packaged goods giant Procter & Gamble (PG) represents Cramer's blueprint for making money in any market environment. The company behind Tide, Crest, and dozens of other household staples offers a 2.85% yield and the kind of predictable business model that doesn't depend on anyone's vision of the future.

"I use Procter & Gamble on how to make money in any market, because the company is so rigorous and inventive," he explained. "Procter yields 2.85% and you know it has the scale and the science to make things cheaper."

People still need toothpaste and detergent when the stock market tanks, which is basically the entire pitch for owning consumer staples during turbulent times.

Johnson & Johnson

Cramer expressed particular enthusiasm for Johnson & Johnson (JNJ) earlier this month, highlighting the FDA's approval of its Caplyta drug for treating major depressive disorder in adults. He sees the healthcare giant as willing to tackle complex medical challenges that competitors avoid.

"They are tackling things that no one else even wants to go after," Cramer said.

In another segment, he grouped Johnson & Johnson with Amgen Inc. (AMGN) as dividend plays worth owning, noting both offer yields exceeding 2.7%.

"I think you'd do very well with owning Johnson & Johnson or Amgen," he said. "They both have yields more than 2.7%."

The broader message is clear: Cramer thinks the easy money phase of AI investing has ended, and investors need to get comfortable with companies that generate actual cash and return it to shareholders. Whether he's right about AI's trajectory remains to be seen, but his pivot toward defensive dividend payers reflects a noticeably more cautious market outlook than the enthusiasm that dominated much of the past two years.