CNBC’s Jim Cramer on Friday warned investors to exercise caution when approaching mega-cap tech stocks, which have come under pressure this year.
“If we see these stocks rally back to their old levels… Let’s remember that prices matter, and we don’t want to get burned the next time they get too high,” he said. “Right now we want cheap stocks of companies that are making things or doing things for a profit and giving back some of those profits to shareholders.”
Shares rose on Friday but were still down for the week as investors remain concerned about a potential recession.
Tech stocks have been hurt this year by persistent inflation, Federal Reserve rate hikes and Covid lockdowns in China. Prior to this year, mega-cap tech names soared to stratospheric heights and were largely responsible for the strength of the market.
Tesla, meta platforms, NVIDIA, Amazon, alphabet, Microsoft Spirit Apple — all major stocks in the S&P 500 — lost a combined $5.4 trillion in value, according to Cramer.
He said that while he doesn’t blame investors for betting on these stocks this year, he believes investors need to learn from their mistakes in 2023.
“They will be able to bounce back next time we see a nice rally in the broader index and I think we will have one. I think you should take this chance to stick with mega-cap tech,” he said. “I bet you have a chance to buy them a little cheaper.”
Disclaimer: Cramer’s Charitable Trust owns shares of Meta Platforms, Amazon, Alphabet, Microsoft and Apple.
