CNBC’s Jim Cramer on Monday dismissed concerns about a concentration of market capitalization in the Magnificent Seven, saying the group is tied together by its high growth rate, not its product.
“For equity investors, growth is what matters, not data centers or high-speed computing or even artificial intelligence,” he said. “The common denominator among the Magnificent Seven is growth, and growth is what the market always loves.”
Magnificent Seven — Amazon, alphabet, Meta, apple, microsoft, Nvidia and tesla These are some of the most well-known companies on the market, with artificial intelligence chip giant Nvidia recently becoming the first company to reach a valuation of $5 trillion.
Kramer said he understands that some people tend to avoid tech mega-cap stocks and look for cheaper stocks. But he emphasized that technology-intensive companies continue to reap profits. Nasdaq Composite Monday was even better.
He highlighted Amazon’s recent stock price trends and financial results. The company had lagged behind big tech companies, but its stock soared 10% last week after a strong quarterly report showing strong growth in its AWS cloud division. Amazon added another 4% to close at a new record on Monday after announcing a $38 billion deal with OpenAI.
Despite their mega-cap size, Kramer suggested that Amazon and its peers are “having some of the best growth in the world.” Growth stocks are often safe investments because they can withstand some macroeconomic hardship, he added.
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