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Jim Cramer Discusses CoStar Group’s Stock Decline and the Threat of AI

CoStar Group, Inc. (NASDAQ:CSGP) is among the stocks in focus as Jim Cramer reviewed the S&P 500’s top performers and the Nasdaq 100’s biggest laggards for the first quarter.

Third-worst was one I really wasn’t that familiar. It’s called CoStar Group, down 40%. Now, you can think of it as kind of a Zillow of commercial real estate. Problem is, this quarter was brutal for companies that compile and organize useful data, a business model that can easily be duplicated by the big AI platforms. Is that the right read, though? Doesn’t really matter for now.

Stock market data. Photo by Jakub Zerdzicki on Pexels

CoStar Group, Inc. (NASDAQ:CSGP) provides information, analytics, and online marketplace services for the real estate industry. During the March 2 episode, Cramer highlighted AI fears around the company and said:

The second biggest loser in February was another victim of AI that I am very concerned about. It’s called CoStar Group, and that was down 27.4%. CoStar offers online marketplace services, data, and analytics for the commercial real estate market. It’s sort of like a Zillow for commercial properties. Their stuff is proprietary, but maybe it becomes a lot less valuable when AI can easily write code to gather the same data. That seems reasonable to me, a real fear. Just like EPAM, CoStar reported a strong fourth quarter report in February, but paired that with a disappointing forecast. So many of these stocks have been crushed by AI worries, and the ones that got hit hardest are like CoStar, where these worries have actually started to hit the numbers instead of just being a possibility down the road.

While we acknowledge the risk and potential of CSGP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CSGP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

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