CNBC’s Jim Cramer said market pullbacks from geopolitical shocks shouldn’t sideline investors, arguing that the greater opportunity lies in owning the companies that will drive the economy’s next phase of growth.
“What you really need to own are the companies that are actually dominating the new economy,” Cramer said Monday on “Mad Money,” naming the data center and artificial intelligence companies that have driven much of this year’s market rally.
Mr. Kramer’s comments are as follows: Dow Jones Industrial Average Oil prices and U.S. Treasury yields plunged by more than 1% on Monday as tensions flared in the Middle East.
Cramer has long warned that geopolitical risks matter most to investors through their impact on oil and interest rates, which can ripple through markets. Still, he said investors should not pull their money out of stocks despite the economic resurgence, pointing to deeper structural changes in the U.S. economy that continue to support growth.
“This economy is a computer-driven economy,” Kramer said. “We are powered by computing.”
Mr. Kramer said the transformation has helped key parts of the market, particularly technology, cloud and data center companies, escape concerns about war-related drag on economic growth. Demand for computing power, AI infrastructure, and digital services continues to grow, even as oil prices rise and borrowing costs remain elevated.
he pointed to Amazon It’s an example of a company built to withstand the pressures of large logistics networks, growing cloud businesses, and connections to the AI boom. Kramer added that its durability also stems from its core strategy of keeping prices low and positioning itself as a low-cost option in case consumers back out. Amazon is a holding in a charitable trust, a portfolio managed by CNBC’s Investment Club. It’s still up about 17% this year.
“Rising interest rates could put many companies out of business. But if you want to guess who will survive in the end, you could do a lot worse than betting on Amazon,” he said.
Kramer said market downturns associated with macro shocks may cause short-term pain, but long-term trends remain unchanged. “We’re becoming more and more computer-oriented,” he said. He said that in a computer-driven economy, “we don’t really care about oil or interest rates.” “Computer momentum is going in one direction, higher, and a huge number of stocks are being consumed along with it.”
