Famed investor Jim Cramer says Procter & Gamble (NYSE: PG) may be a better pick than artificial intelligence (AI) hyperscalers heading into 2026.
More importantly, his bullish view on PG shares is not entirely based on a healthy 2.89% dividend yield – something that the consumer goods behemoth is most celebrated for.
In a recent segment of Mad Money, Cramer recommended long-term investors to capitalise on this year’s weakness in Procter & Gamble stock that’s currently down more than 17% versus its year-to-date high.
Why Cramer favours Procter & Gamble stock over AI giants
For the coming year, former hedge fund manager Jim Cramer’s favourite tech-related investments aren’t the hyperscalers competing in the global AI arms race.
Instead, he sees a better opportunity in businesses that are actively tapping into artificial intelligence to improve efficiency.
“My favourite tech stocks right now are business-to-business users of technology,” he explained.
Cramer remains bullish on PG stock as it’s leveraging AI to streamline factory design and optimise logistics. Instead of spending billions on building artificial intelligence, the titan uses it effectively to save millions.
Capitalising on AI without the burden of massive research and development (R&D) – he added – enables Procter & Gamble to aggressively cut costs and accelerate product development.
All in all, this approach positions the NYSE-listed company to deliver consistent returns while still benefiting from the transformative power of AI.
The problem with owning big-cap AI stocks heading into 2026
Investors should note that the overall importance of building AI infrastructure isn’t lost on Cramer at all – neither is he bearish on the likes of Nvidia, Microsoft, or Meta Platforms.
His only concern about hyperscalers – most of which have seen meteoric rallies in recent years – is that their future is clouded by excessive spending and fierce competition.
“These big tech stocks can’t advance unless they can rein in their spending … but I just don’t know how they can,” the Mad Money host said.
Oracle’s latest quarterly release suggests pouring billions into AI infrastructure doesn’t guarantee immediate profits – leaving investors uncertain about the return on these investments.
According to Jim Cramer, this murkiness makes AI hyperscalers less appealing than the likes of Procter & Gamble shares that simply harness the technology.
How Wall Street recommends playing PG shares here
Cramer’s analysis underscores a broader theme in the market: investors should distinguish between firms that innovate for efficiency and those that burn cash chasing dominance.
His bullish view on PG shares is in line with Wall Street analysts. The consensus rating on Procter & Gamble currently sits at “overweight” with the mean target of nearly $170, indicating potential upside of over 15% from here.
In short, for investors seeking stability, dividends, and measured growth, P&G offers a safer bet than hyperscalers whose future remains uncertain amid relentless spending battles.
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