- CNBC’s Jim Cramer told investors on Monday that only shares of the tech giant Magnificent Seven that have cash to spare can compete with the bond market.
- These stocks include Apple, Alphabet, Meta, Amazon, Microsoft, Nvidia, and Tesla.
CNBC’s Jim Cramer told investors on Monday that while most stocks can’t withstand the “gravity” of the bond market, many prominent mega-technology stocks that have spare cash are able to hold their own.
Cramer referred to this group of Nasdaq composite stocks as the Magnificent Seven, and it includes Apple, Amazon, Meta, Alphabet, Nvidia, Tesla and Microsoft.
“We’re in an unusual situation, but skyrocketing bond yields are bad news for the bulk of the market. Big tech companies are the one big exception. Do you want to ride out this tough moment?” – asked Kramer. “You need the Great Seven, and then the rest.”
For Cramer, few companies have the balance sheets and product demand to withstand competition in the bond market. He said Magnificent Seven’s shares are not hurting for money, and are in fact “making a fortune from their significant cash hoards”.
“It’s funny, we used to look at their huge cash positions and their attempts to manage money to try to bring in a little extra income as just kind of a waste of time, or an abstract idea,” he said. “Now they’re the big winners, and I think you’ll start to see a line item in their quarters, the money they’re making in their pockets, which can finally offset some of their miserable losses from that strong dollar.”
For example, Cramer said, Nvidia’s valuable graphics chips make them the envy of most companies interested in AI, even other major companies in the technology space. Microsoft, Alphabet, Meta and Apple have stored cash for years and are now reaping those rewards, he added. For Cramer, these stocks no longer have to deal with concerns about inflation or long-term value. When the bond market calms down, these companies will be recognized for their solvency, he said.
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Disclaimer The CNBC Investing Club Charitable Trust owns shares in Apple, Amazon, Meta, Alphabet, Nvidia, and Microsoft.
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