Jim Cramer said Thursday that the liquidation of Situational Awareness, the roughly $20 billion AI-focused fund founded by Leopold Aschenbrenner, could be read as bullish rather than bearish.
“I have always believed that when you clear out the people who have to sell, like this gentleman, you get a bottom,” Cramer said on CNBC’s “Squawk on the Street.”
Cramer went further, arguing Situational Awareness is unlikely to be an isolated case: “This is a clearing event… because he’s not the only one. There are so many people margined in these same stocks,” he said.
- BE stock is soaring. See the chart and price action here.
Why Cramer Is Talking About This Fund
Situational Awareness built its portfolio around long positions in AI infrastructure names such as Bloom Energy (NYSE:BE), Micron Technology (NASDAQ:MU) and CoreWeave (NASDAQ:CRWV), paired against shorts in software stocks.
The fund used leverage that amplified its losses during the recent AI-sector pullback, ultimately selling its entire public equities book and turning to investors and lenders for fresh cash — including offers to sell assets directly — while keeping private holdings such as its Anthropic stake.
That backdrop is what makes Cramer’s framing notable: he’s pointing to a specific, high-profile forced seller as the type of capitulation that historically precedes a floor, rather than a signal of further downside for AI stocks.
Opposite-Direction Bets Reversing
The fund’s paired trade had been working against it heading into Thursday — its AI infrastructure longs, including Micron, had pulled back sharply from June highs, while shorted software names such as Adobe (NASDAQ:ADBE) had rallied.
Both the AI and software trades were reversing Thursday as the fund’s book changed hands — the kind of snapback Cramer’s “clearing event” thesis would predict once a forced seller is done selling.
Niles Made a Similar Call Hours Earlier
Cramer wasn’t alone in that view Thursday. Market strategist Dan Niles said forced liquidations and margin calls across retail and hedge fund accounts had produced a “short-term bottom” in AI-adjacent stocks, calling it a “cleansing process” that prime brokers are managing carefully to avoid a repeat of the Archegos Capital blowup.
Niles framed a recent memory-chip earnings miss and capex cuts as a “speedbump,” not the top of the AI cycle, and said he expects a “strong rally” once the deleveraging clears.
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