Investors hesitant on AI stocks amid economic uncertainty

Jim Cramer of CNBC said that investors are becoming cautious about artificial intelligence (AI) stocks. Despite the excitement around AI, they are not willing to pay high prices for these stocks anymore. Cramer noted that the uncertain economic climate is making investors anxious. They feel nervous about risks that could affect their investments. Cramer explained that when people are scared, they tend to avoid risky stocks, even if there are no changes in the companies themselves. This phenomenon is called "multiple compression," where stock prices fall without any real change in the company's performance. He pointed to concerns about President Trump's fluctuating tariff policies and comments on the economy. These fears influenced the stock market on Tuesday, causing declines in major indices. The Dow Jones fell by 0.62%, the S&P 500 dropped 1.07%, and the Nasdaq lost 1.71%. Cramer mentioned that even positive news from Nvidia's annual GTC conference did not help. Nvidia's CEO presented new AI chip developments, but the company's stock still dropped more than 3%. He suggested this shows how vulnerable tech stocks, especially those tied to AI, are in the current situation. Cramer believes this trend will continue until the economic environment improves or stock prices become more reasonable. He also noted that sectors like enterprise software and biotech could also face losses due to similar concerns.