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Jim Cramer endorses NVIDIA compute bonds concept tied to data center gear
CNBCs Mad Money segment drew parallels between securitizations backed by data center equipment and existing auto and home loan-backed credit.
Yahoo Finance reports that on CNBCs Mad Money, host Jim Cramer discussed the idea of so-called compute bonds, instruments backed by artificial intelligence hardware used in data centers rather than traditional collateral.
Cramer said major investment institutions are preparing for issuance of compute bonds and compared the concept to established securitized credit markets, where pools of assets support debt securities.
The segment also pointed to NVIDIA CEOs view that data center chips can retain long-lasting value, and it noted that Goldman Sachs CEO David Solomon supported the approach.
Cramer argued that NVIDIA graphics processing units have not shown much depreciation, contrasting that with vehicles, and he called the strategy brilliant while likening the potential disruption to earlier eras of mortgage and real estate finance.