Have you ever watched a stock you believed in just completely fall apart, month after month, until even the most optimistic voices go quiet? That seems to be exactly what’s happening right now with Recursion Pharmaceuticals, and last night Jim Cramer finally said out loud what a lot of people have been thinking privately.
When the Lightning Round bell rings on Mad Money, you know answers are coming fast and unfiltered. One caller asked about Recursion Pharmaceuticals (RXRX), the AI-powered drug discovery company that was supposed to revolutionize biotech. Cramer’s response was about as blunt as it gets.
When Even Jim Cramer Throws in the Towel
“I am, myself, confounded by it,” Cramer admitted on air. Then came the line that’s now echoing through trading chats and investor forums: “The stock has been horrendous… So I do not like to recommend horrendous stocks.”
Let’s be honest, when Jim Cramer, the guy who literally wrote the book on getting rich carefully and has spent decades championing innovative companies, calls your stock “horrendous” on national television, that’s not just a yellow flag. That’s a flashing red warning light.
The stock has been horrendous… So I do not like to recommend horrendous stocks.
Jim Cramer, Mad Money Lightning Round, December 4 2025
What Actually Happened to Recursion?
It wasn’t that long ago that Recursion Pharmaceuticals felt like the future. Here was a company using artificial intelligence and machine learning to do what traditionally took pharmaceutical giants years and billions of dollars, screen millions of compounds, find promising drug candidates, all at warp speed.
The story was beautiful. Their platform could potentially cut drug development time dramatically. They had partnerships with big names like Roche and Bayer. The AI healthcare narrative was red-hot. Investors piled in.
Then reality started biting.
The Brutal Numbers Don’t Lie
Let’s look at what’s actually happened to RXRX stock. This isn’t opinion, this is cold, hard market reality.
At its peak in early 2021, Recursion traded above $40 per share. As I write this, it’s struggling to stay above $6. That’s more than an 85% decline from all-time highs. Even worse, it’s down over 40% just this year alone.
Think about that for a second. While the broader market has been making new highs, while other AI-related stocks have been on fire, Recursion has been in freefall. That’s not normal market rotation. That’s something fundamentally breaking.
- From $42+ to under $6 in less than three years
- Down more than 40% year-to-date in 2025
- Trading near its lowest levels since going public
- Market cap has evaporated by billions
- Multiple secondary offerings diluting shareholders
Why the Dream Started Cracking
The problems aren’t hard to spot when you dig past the AI marketing gloss.
First, there’s the cash burn. Like many biotech companies chasing the next breakthrough, Recursion spends money like it’s going out of style. They’re burning through hundreds of millions every year with no meaningful revenue to show for it yet. In the latest quarter, they reported just $10.5 million in revenue against $143 million in operating expenses.
That’s not sustainable long-term without either massive success or constant trips to the capital markets, which means more share dilution for existing investors.
Second, the clinical progress has been slower than many expected. While they have multiple programs advancing, we’re still years away from potential commercial drugs. The market rewarded the story aggressively early on, but patience is wearing thin as timelines stretch and costs mount.
The AI Drug Discovery Reality Check
Here’s where it gets really interesting, and honestly, a bit sobering for anyone excited about AI in healthcare.
AI is genuinely transformative in drug discovery. The ability to screen billions of compounds virtually, predict binding affinities, identify novel targets, these are real advantages. But turning those early discoveries into actual FDA-approved drugs that make money? That’s still the same decades-long, billion-dollar slog it’s always been.
The AI gets you to clinical candidates faster and cheaper. It doesn’t magically make Phase 2 and Phase 3 trials quick or guaranteed to succeed. The 90% failure rate in clinical trials hasn’t disappeared just because you’re using better technology to pick your shots.
Recursion isn’t alone in this. The entire AI-biotech sector has been getting a harsh reality check in 2025. Many of these companies soared during the pandemic tech boom and are now coming back to earth as investors demand actual results, not just promising technology.
What Cramer’s Comments Really Tell Us
When Cramer says he’s “confounded” by the stock action, I think he’s speaking for a lot of people. This was supposed to work. The technology is genuinely impressive. The partnerships are real. The vision makes sense.
But the market doesn’t care about your technology if you can’t turn it into profits eventually. And right now, Recursion is a long, long way from profitability.
Cramer’s refusal to recommend it isn’t some dramatic bearish call. It’s actually pretty measured. He’s not saying the company is going to zero or that the technology doesn’t work. He’s just acknowledging the obvious: this has been a terrible investment, and there’s no clear catalyst right now to change that trajectory.
The Broader Lesson for Growth Investors
There’s a bigger story here that goes beyond just one company.
We’ve seen this movie before. Brilliant technology + compelling narrative + massive hype = explosive gains followed by devastating crashes when reality fails to match the dream on Wall Street’s timeline.
Remember 3D printing stocks? Remember cannabis stocks? Remember the first wave of electric vehicle companies that weren’t Tesla? The pattern is painfully familiar.
Innovation is real. Progress is happening. But the stock market prices in the future aggressively, and when that future takes longer to arrive than expected, or costs more than anticipated, the reckoning can be brutal.
Where Do We Go From Here?
So is Recursion Pharmaceuticals dead money forever? Not necessarily.
They still have substantial cash on the balance sheet. They still have those big pharma partnerships that provide both funding and validation. They still have a platform that could, eventually, produce meaningful clinical successes.
But “eventually” is the key word. And the market has decisively said it’s done waiting.
At current levels, the stock is pricing in a lot of bad news. If they can start showing real clinical progress, particularly in their more advanced programs, there could be substantial upside. But that’s a big if, and it’s going to take time.
For most investors, especially those who need to see results in years rather than decades, this remains a very speculative situation.
The Bottom Line
Jim Cramer’s comments weren’t dramatic or sensational. They were actually pretty straightforward and honest.
Recursion Pharmaceuticals has been a horrendous stock. The performance speaks for itself. Until there’s clear evidence that the fundamental story is starting to deliver actual results rather than just potential, it’s hard to make a bull case that matters.
The technology might very well change drug discovery eventually. But investing is about what happens between now and eventually, and right now, that gap looks painfully wide.
Sometimes the hardest thing in investing is admitting that a great story just isn’t a great investment, at least not yet. Cramer did that last night. The question is whether investors holding RXRX can do the same.
In a market that’s rewarding profitability and real earnings growth, companies burning cash while promising revolutionary technology decades away face a very tough environment. Recursion Pharmaceuticals is learning that lesson the hard way, and Jim Cramer just reminded everyone watching exactly how painful that lesson has been.
