Jim Cramer says Adobe stock didn’t soar for no reason: Generative AI is worth the hype

FAN Editor

CNBC’s Jim Cramer told investors on Thursday that above all else, they should not underestimate the transformative power of generative artificial intelligence, as it has the potential to revolutionize most industries, from auto manufacturing to fast food.

“Tonight, I want to explain why the AI bulls could actually be right,” Cramer said. “I want to talk about why the bears are likely wrong.”

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Adobe stock soared on Thursday, with shares up nearly 5% by market’s close. Cramer said this is because Adobe‘s software — namely its program Firefly — can be used well with supercomputers that are at the heart of the AI revolution.

Cramer stressed you should not get bogged down in the ethereal, macro way in which many authorities discuss the potential of AI. Adobe’s Firefly alone could save company’s huge amounts of time and money, and just because we’re not yet sure of the specifics does not mean we should discount such a groundbreaking innovation, Cramer said.

Cramer referenced Nvidia CEO Jensen Huang’s Computex speech in Taiwan, where he said AI will have the most significant impact on the business of making factories. Although the industry is not always in the public eye, Cramer told viewers to remember that it is a multitrillion-dollar industry and the biggest one in the world.

AI has the power to create digital twins of entities like factories, so companies can save enormous amounts of time and money by running changes through artificial twins instead of letting things play out in real life. Car manufacturer BMW is about to start building the first factory imagined using such a digital twin.

“So, what’s it worth? Again, we’re not able to calculate it, darn it,” Cramer said. “However, if you remove the largest amount of friction from the biggest industry in the world, you could see a real GDP impact, that’s not nonsense.”

Cramer also reminded audiences about AI’s potential across industries. Fast-food chain Jack In The Box is already using AI in its drive thru locations, which CEO Darin Harris said saves on the cost of employees and actually manages to up-sell more efficiently to customers.

“Here’s the bottom line: when you consider the scale of the business-to-business opportunity, you can see why AI might be worth far more than most people realize, even if it’s too early to calculate the exact numbers,” Cramer said.

“I know there’s a lot of hype here and in some individual cases, it is overblown, but anybody who tells you that the AI theme’s pure hype — that person is only fooling herself.”

Cramer takes on the bull and bear debate over A.I.

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia.

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