CNBC’s Jim Cramer said Thursday that he won’t defend the tech giants known as the Magnificent Seven, even though most of them got off to a slow start in 2026.
“I think ultimately the money will go back to most of the (Mag7) companies because these companies have so much means and so much money. They’re run by people who are too smart to bet on it,” Kramer said on “Mad Money.”
The Mag 7 cohort consists of: Amazon, alphabet, apple, microsoft, meta platform, Nvidia and tesla. AI chip manufacturer broadcom Kramer noted that other stocks are sometimes lumped into that group as well. Of these eight stocks, only Amazon and Google’s parent company Alphabet have increased since the beginning of the year.
Kramer said he believes one of the big reasons these stocks, once the leaders of the AI-powered bull market over the past few years, have cooled off recently is the unusually strong rally in storage and semiconductor equipment stocks. “These stocks are contributing to the market capitalization of these storage companies,” Kramer said.
micron is one of the companies benefiting from this market rotation due to the shortage of memory chips essential for AI computing, soaring about 39% year-to-date and doubling in the past three months. shares of seagate, sandiskand western digital And as demand for storage skyrockets, these companies are giving their customers immense pricing power.
“We’re in this weird, never-before-seen moment where storage companies keep raising prices over and over again. These devices are like gas in your car, so there’s no resistance,” Kramer said. “If we run out of oil and gas prices are high, I can’t say we won’t use it. We’ll have to pay whatever the price is,” he continued.
However, Cramer said he believes memory price spikes won’t last forever and will eventually mean these stocks will start to lose momentum. That’s why Mr. Cramer argued that now is not the time to jump into large-cap tech stocks. Ultimately, he believes investors will come back to them.
“I’m sticking with (magnitude 7),” Kramer said. “When[storage play]finally peaks, if you stay with[Mag 7]you’ll be rewarded handsomely.”
Disclosure: Cramer’s Charitable Trust, a portfolio used by CNBC Investment Club, owns stock in GOOGL, META, AAPL, AMZN, NVDA, MSFT, and AVGO.
