Cramer’s week ahead: AI data center stocks face another hurdle and so does the Fed

A UBS estimate reported by Reuters says about 30% of the data‑center capacity the United States plans to add in 2028 could be at risk, a figure that analysts say could dent Nvidia's (NASDAQ:NVDA) growth story. Nvidia disclosed that its fiscal 2027 second‑quarter data‑center revenue jumped 117% year over year to $89.023 billion, and it guided third‑quarter revenue to $108.0 billion plus or minus 2%. The company also locked in $279 billion of supply obligations, mainly for memory, and $108.5 billion in guarantee obligations to AI cloud partners. Yet CFO Colette Kress warned, "This is a supply‑constrained outlook," pointing to power, land, cooling and construction bottlenecks as key pressure points. Broadcom chief executive Hock Tan added, "To deploy an AI data center at scale, land, power and shell are major constraints and dictate timing."

The risk of delayed capacity is reverberating across the market. Nvidia shares fell 21.4% over the past month, sliding from $237.47 on October 7 to $186.64 on November 6, leaving the stock up just 0.31% for the year, according to 24/7 Wall St. Broadcom, Eaton and Constellation Energy posted similar declines, while data‑center landlords like Equinix and Digital Realty fell far less, suggesting investors are rewarding firms that already own permitted, powered sites.

Jim Cramer, host of Mad Money, warned that the AI sell‑off could deepen, especially for smaller infrastructure firms such as CoreWeave, Iren and Nebius, which have taken on heavy debt to fund data‑center projects that may face regulatory delays. Cramer said the week ahead "might be even worse" and cautioned that "anti‑data center politicians could stop projects if Democrats took control," a concern he linked to a recent dip in AI‑related stocks. While he sees the current downturn as unlike the 2000 dot‑com crash, Cramer remains bullish on larger chipmakers like AMD and Microsoft, noting strong earnings and cash‑flow discipline.

Research firm 3Fourteen, led by Warren Pies, echoed the cautionary tone. The firm downgraded its stance on AI stocks from overweight to neutral, citing weakening market signals and rising borrowing costs. Pies warned that the massive AI data‑center build‑out could push inflation higher, prompting the Federal Reserve to raise interest rates. He said, "The risk is that the Fed doesn't stop until they've broken something in the AI trade in the funding markets." The firm also highlighted that GPU rental rates rose nearly 12%, from $5.88 per hour on October 8 to $6.58 on Friday, underscoring persistent demand despite the sell‑off. Using satellite imagery, 3Fourteen projects more than 27 gigawatts of additional capacity to come online in 2027.

Analysts are split on the long‑term revenue outlook. For the fiscal year ending January 2028, estimates range from $506.483 billion to $778.471 billion. If the 30% capacity shortfall materializes, Nvidia could face higher costs and delayed revenue, even as its margins are expected to dip to the low‑70s percent range in the fourth quarter. Constellation Energy’s chief executive expects a PJM response around November and cleaner co‑location rules in the first half of 2027, factors that could ease some of the infrastructure constraints.

Overall, the combination of regulatory uncertainty, financing pressures and the looming possibility of tighter Fed policy is adding a new layer of risk to an AI rally that has already seen $2.5 trillion erased from market valuations, according to 24/7 Wall St. Investors will be watching Nvidia’s upcoming earnings report and the Fed’s policy signals closely to gauge whether the AI boom can sustain its momentum amid these delivery challenges.