Jim Cramer comments on the huge losses of the "AI Stock Guru’s" fund: AI trading faces "market shakeout," and the "long hardware, short software" strategy is under pressure

Odaily reports that, regarding the event where the "AI Stock Guru" fund Situational Awareness closed all its public market stock positions after suffering massive losses, CNBC host Jim Cramer stated that this might signal the AI sector is experiencing a "market clearing event."

Cramer believes that when leveraged funds and forced selling are fully released, the market is often near a short-term bottom. He also pointed out that going long on AI hardware and short on software is not a strategy unique to this fund, so this liquidation event could have a broader impact on the entire AI trading space.