Cramer said he thinks the tech “bloodletting” was triggered by several factors, including tepid earnings from Tesla and Netflix as well as less-than-stellar results from the biggest maker of semiconductors, Taiwan Semiconductor as investors question the artificial intelligence “frenzy” that has been driving this year’s tech rally.
“Now, you know many of these stocks trade together, and they get hammered together,” Cramer said. “But if you owned a diversified portfolio, including beaten-down stocks for 2023, stocks that represent great value now, you crushed it.”
Cramer still believes in sticking with the Magnificent Seven — Microsoft, Nvidia, Alphabet, Apple, Amazon, Meta and Tesla — but he said he’s a little “nauseated” to see the same stocks continue to rise, leading to an overbought market. He told investors to look out for stocks in different sectors and to find companies with strong intrinsic value.
Cramer saw winners on Thursday in the health-care sector, specifically Johnson & Johnson and Abbott Labs. The former has been plagued by ongoing litigation alleging the talc in its baby powder causes cancer, but Cramer said the company just reported “spectacular” fundamentals. According to Cramer, Abbott Labs has been experiencing a Covid hangover, but it has a strong medical device business and a robust baby formula franchise. He said he thinks both stocks can go higher.
Cramer also had his eye on the banking sector, naming JP Morgan, Wells Fargo and Bank of America as top contenders, as well as retail players like Walmart, Costco and Ralph Lauren. He also advised that investors look into the utilities sector, including Sempra, PG&E and American Electric Power, along with transports, especially railroad company Canadian Pacific Kansas City.
Cramer conceded he’s not sure this broadening market move has staying power, wondering if tech will return to its top slot next week. But to him, there’s more to the story.
“Tech won’t be forsaken, but it’s not going to come back immediately. I’d say maybe give it a week,” he said. “But the admission of other stocks to the brethren of the bull is excellent news for the market. Let’s hope it lasts.”
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
Disclaimer The CNBC Investing Club Charitable Trust holds shares of Apple, Amazon, Johnson & Johnson, Meta, Microsoft, Nvidia and Costco,
.Questions for Cramer?
Call Cramer: 1-800-743-CNBC