A recent plunge in artificial intelligence-related shares may be a distortion driven by money flows, an assessment said.

On Oct. 19, local time, CNBC reported that Cramer said the recent simultaneous decline in semiconductor and data centre-related stocks resembles aspects of the automated selling seen during 1987's Black Monday.

In October 1987, the Dow Jones Industrial Average fell 22.6 percent in a single day. A portfolio insurance strategy designed to limit losses instead amplified automated selling, deepening the drop. Cramer said even companies with solid fundamentals saw their shares plunge because of automatic selling and that, in hindsight, it was a good buying opportunity.

That view has expanded to the broader tech theme in recent weeks. Last week, the S&P 500 fell about 2 percent for its biggest weekly drop since late June, and the Nasdaq Composite slid 4.5 percent, snapping a four-week run of gains. Semiconductor and data centre stocks fell sharply regardless of company size.

He pointed to the gap between stock prices and corporate value as the key issue. He added that some data centre-related shares are now moving in ways unrelated to fundamentals. They rise together and also fall together without any particular issue, he said.

Cramer cited the possibility of hedge fund liquidations as a driver of the selloff. He said it could be similar to the situation during the collapse this summer of a high-leverage fund called Situational Awareness. It has not been confirmed, however, whether additional liquidations have actually occurred. He explained that if a fund is forced to sell holdings to cover losses, share prices can fall in tandem regardless of individual company conditions.

Market reaction led to a partial rebound early in the week. Cramer called it “Green Monday,” noting that the S&P 500 and the Nasdaq Composite recouped some of last week’s losses in the first trading session of the week. He stressed, however, that distinguishing the nature of the decline matters more than a short-term bounce itself.

He also set out a clear yardstick for investors. He said they should distinguish between stocks falling because the business is actually weakening and stocks pressured by supply-demand factors outside a company’s control. Cramer said, “Big swings can happen depending on the situation, but it can be unrelated to fundamentals.”

His remarks focused on the phenomenon of semiconductor and data centre stocks moving sharply in the same direction during the recent correction in the AI theme. Even without confirmed deterioration in individual company performance or business changes, selling pressure can spread, and the message is being read as a need for the market to watch both stock-by-stock fundamentals and whether leveraged funds are being liquidated.