Cramer examines Thursday's tech gains, says AI is a dominant theme in the market

• CNBC's Jim Cramer explained why tech stocks like AMD and Alphabet surged, saying innovators in the generative AI space will continue to see gains.
• "I know it seems old hat by now, but generative AI just keeps astonishing us, and as long as it does, the stocks behind it will astonish, too," he said.

CNBC's Jim Cramer broke down why certain tech stocks saw significant runs on Thursday, saying innovators in the generative artificial intelligence space will dominate the market.

"The generative AI revolution is once again becoming the dominant theme in the stock market," Cramer said. "Today we saw how it can dwarf all others in the averages, as any stock with exposure to what's essentially a whole new industry, erupted higher."

The Nasdaq Composite advanced 1.3% on Thursday as technology stocks outperformed. Cramer pinpointed several tech stocks that saw notable gains, including Advanced Micro Devices, which was up 9.89% by close, and Alphabet, which was up 5.31%.

Cramer said AMD was the "most immediate spur" for the AI rally, with the stock's spike stemming from comments CEO Lisa Su made on Wednesday. Su said she believes the total market for AI chips could climb to $400 billion over the next four years, twice as high as the company previously predicted.

Nvidia has so far dominated the AI chip game, but Cramer said investors feel there is room for more than one player on the market. Meta and Microsoft announced Wednesday they would use AMD's newest chip, which could signal that tech companies want alternatives to Nvidia's costly graphics processors.

Alphabet also took a "gigantic leap forward" on Wednesday, Cramer added. The Google parent launched its latest and most powerful advanced AI model, Gemini. Cramer said Gemini showed investors that the company's capabilities expand beyond YouTube and its search business, adding that the stock is "playing catch-up" with the rest of the AI cohort.

"I know it seems old hat by now, but generative AI just keeps astonishing us, and as long as it does, the stocks behind it will astonish, too," he said.

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

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