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- CNBC’s Jim Cramer said tech stocks continue to offer the market’s biggest upside because companies can quickly create new catalysts that reshape their valuations.
- He pointed to Meta, SK Hynix and Alphabet as examples of tech companies with multiple paths to unlock shareholder value beyond quarterly earnings.
CNBC’s Jim Cramer said Monday that tech stocks remain the market’s best hunting ground for investors looking for outsized gains.
“The tech companies, especially big tech, just have so much more to offer than the rest of the market,” the “Mad Money” host said.
As oil prices climbed Monday after President Donald Trump announced he was reinstating a blockade on Iran in the Strait of Hormuz, investors rotated into sectors that typically benefit from higher energy prices. Cramer argued companies in those industries are unlikely to produce the kind of long-term returns that technology companies can generate through new products, strategic initiatives and shifting investor narratives.
Meta, he said, is a prime example. After Cramer repeatedly urged the Facebook and Instagram parent to consider selling some of its artificial intelligence computing capacity, the company said it was considering monetizing its AI infrastructure, which helped send the stock up 15% last week. Cramer’s Charitable Trust, the portfolio run by CNBC’s Investing Club, owns shares of Meta.
“A simple acknowledgement of something that seemed so obvious gave you a nearly 100 point gain this month,” he said.
Cramer contrasted Meta’s move with PepsiCo, whose latest earnings report disappointed investors despite management’s operational improvements. PepsiCo’s stock dropped more than 3% after the report.
“By a simple stroke of a pen, Meta gives you almost 100 points,” Cramer said. “By dint of a weak quarter, PepsiCo takes a severe beating.”
Alphabet offers another example, he argued. Cramer said the Google parent could unlock substantial shareholder value by simply spinning off Waymo, while companies such as Slim Jim parent Conagra and drugmaker Pfizer “just don’t have that level of control over their own destiny.”
For Cramer, that’s what continues to separate technology from the rest of the market. While other sectors often depend on incremental operational improvements, he said tech companies can create entirely new catalysts that quickly reshape how investors value their businesses.
“After a month where Meta does the obvious and picks up 100 points, tech certainly seems to be a much more fertile ground to plow than any other sector,” he said.
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