Amazon Stock Pulls Back Amid Market Pressure, Cramer Defends Nvidia's AI Bet

The stock market is experiencing pressure as investors reassess interest-rate risks and financing conditions for capital-intensive sectors. According to Jim Cramer, Amazon's latest pullback after a new Federal Trade Commission lawsuit does not justify a sell-off in the stock.

Data center stocks have declined as investors react to rapid AI infrastructure spending, favoring software, pharmaceuticals, banks, and energy sectors instead. Cramer argues that Nvidia CEO Jensen Huang's strategy to invest in riskier AI companies leverages residual chip value and boosts Nvidia's market share among AI labs.

Anthropic has signed a $35 billion cloud-computing deal with Lambda, where Nvidia supplies chips and leases the Texas data center, strengthening its AI market position. Cramer defends Huang's approach to backing AI companies that traditional banks may consider risky, saying Nvidia benefits from the residual value of its chips due to the ability to recover hardware if a borrower fails to pay.

The pressure on data center names comes as investors weigh rapid spending across AI infrastructure, with sectors such as software and pharmaceuticals holding up better than those more directly tied to the data center buildout. Cramer's defense of Huang's strategy highlights concerns about an 'AI bubble' risk, where soaring valuations and growing borrowing could amplify losses if market sentiment turns.