June 17, 2024

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Cramer cites Nvidia as a “deserved premium” for technology stocks

Cramer cites Nvidia as a “deserved premium” for technology stocks

  • CNBC’s Jim Cramer on Tuesday reiterated his confidence in tech stocks like Nvidia.
  • Cramer said a cover story he read in Money Magazine 40 years ago about the value of technology stocks helped change his mind.

CNBC’s Jim Cramer on Tuesday reiterated his confidence in technology stocks, especially Nvidia and its “Magnificent Seven” peers.

Cramer realized that some investors wonder why technology stock prices are rising, especially when the share price is rising. Cramer admitted he shared these doubts, especially early in his career when similar doubts about the value of technology stocks were prevalent.

Kramer said a cover story he read in Money Magazine 40 years ago helped change his mind about the sector. The money manager author suggested that technology will pick up again after the sell-off. He said that Kramer was initially skeptical of the theory until he saw it proven correct.

According to Cramer, this shift in mindset led him to bring Microsoft into Goldman Sachs as well as other technology stocks he saw as winners, such as Apple and Nvidia.

“Technology has a well-deserved premium because of stocks like Nvidia,” he said. “Sure, you could sell the stock here. And you’d probably look like a genius if it sold tomorrow when it issued a report. But people doubted Microsoft every step of the way, too. They thought it was ridiculously overvalued and they couldn’t justify the payment. This is the way they missed one of the best rounds in history.

Meta, Alphabet, Tesla and Amazon are the other members of Cramer’s Magnificent Seven.

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Disclaimer The CNBC Investing Club Charitable Trust owns shares in Nvidia, Apple, and Microsoft.