Why does Jim Cramer like technology stocks so much? It was because they always innovate, he told his Mad Money viewers on Monday.
In Monday’s session, we saw two more examples of innovation, one from semiconductor maker Nvidia (NVDA) – Get the report and a Microsoft technical one (MSFT) – Get the report.
There are two ways to excel in technology, Cramer explained. One way is to innovate, which is why Jensen Huang, CEO of Nvidia, is known. On Monday, the company updated analysts not only with new products, but also with a better-than-expected advance earnings announcement. Cramer said Nvidia not only challenges Intel (INTC) – Get the report and Advanced micro devices (AMD) – Get the report, has become the most valuable semiconductor company today. Nvidia remains a value game, even after 5.6% on Monday.
Then there’s Microsoft, which showed investors the other way to excel in technology acquisitions. Microsoft announced the purchase of Nuance for $ 16 billion. Satya Nadella CEO said Microsoft and Nuance will help doctors expedite procedures to improve patient care.
Microsoft shares, which change profits 35 times, suddenly seem much cheaper, Cramer said, thanks to clever thinking and impeccable timing.
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Eyes on industrialists
Not all industrial stocks are created equal, Cramer reminded viewers. Some are big companies, he said, but others have big stocks.
For example, Boeing (BA) – Get the report against Honeywell (SHE) – Get the report, two shares owned by Cramer for its charity, Action Alerts PLUS. Honeywell fought last year during the pandemic, but the company received a 30% growth in its security division, which includes personal protective equipment. Now that the economy is reopening, Honeywell will also win thanks to increased business in its specialty chemicals and air conditioning divisions. The shares received a couple of updates from analysts sending stocks to new all-time highs.
Then there is Boeing, which announced another landing of its troubled 737Max aircraft, which recently returned to the air after 18 months on the ground. While the headlines from that last record look bad at first glance, Cramer said they are exactly what we want to see from Boeing. The electrical problem is minor and only affects 90 aircraft, although the company advises great caution, although the problem can be inspected and corrected in a few hours.
That’s why Cramer said Boeing should be bought for the latter weakness. Like Honeywell, it will benefit from economic reopening with strong orders and low interest rates.
Last standing restaurant
Because smaller companies have been forced to file for bankruptcy, larger ones are reaping the rewards, Cramer told viewers. So are restaurants like Chipotle Mexican Grill (CMG) – Get the report you can receive multiple analyst updates and price changes in a single day.
He’s called “the last man on his feet,” Cramer said, and while it’s horrible for the American worker, it’s fantastic for those companies with balance sheets and technology that pivot in our new world. Hundreds of thousands of restaurant closures have placed Chipotle in a strong market position. The company was already a strong digital player and as the dining rooms reopen, it will become even stronger.
The same applies to Yum brands (YES) – Get the report, Restaurants in Darden (DRI) – Get the report and Cheesecake Factory (CAKES) – Get the report, Cramer added, along with Starbucks (SBUX) – Get the report, another winner in the digital field.
In detail, Cramer Costco said (COST) – Get the report is one of the last businesses standing. The retailer just posted sales in the same store that rose 11%, shocking analysts who assumed sales would slow. Cramer also recommended Amazon (AMZN) – Get the report for e-commerce and Planet Fitness (PLNT) – Get the report as one of the last fitness players still standing.
Off the tape
In his “Off The Tape” segment, Cramer sat down with Zach Bruch and Trevor George, co-founders of RECUR, a private company that takes advantage of the new trend of NFTs or non-expendable tokens.
Bruch explained that NFTs are digital assets that use blockchain technology to prove ownership. They are unique pieces of digital products that are unique and last forever. George added that NFTs can represent anything that can be collected, but their usefulness will come later as communities are built around these assets.
When asked about the possibility of a bitcoin-style lock on NFT, Bruch noted that an accumulation and lockout is likely to occur as NFTs are new assets with a lot of speculation. But, he noted, as they mature, brands will begin to figure out the best way to use them and eventually represent real value.
The Fed against inflation
In his “No Huddle Offense” segment, Cramer opined on the prospect of the Federal Reserve raising interest rates to curb inflation. Sooner or later he said the time will come when Jay Powell will have to squeeze. But when that happens, it doesn’t mean the actions are erased.
While it is true that when Janet Yellen raised rates prematurely in 2015, the markets were severely affected. But other times, months passed, even years, until the actions began to react. That was the case in 2004 and 2008, he said, and it could be the case again this time.
But it’s too early to start worrying about interest rates. Without tangible signs of permanent, non-transient inflation, there is simply no need to raise interest rates, which is exactly what Powell has been telling us every time he has.
Round Lightning
Here’s what Cramer said about some of the actions the interlocutors offered during Monday evening at the “Mad Money Lightning Round”:
Cisco Systems (CSCO) – Get the report: “I think they go higher.”
AT&T (T) – Get the report: “Sell, sell, sell”.
Ruth’s Chris Steakhouse (RUTH) – Get the report: “He would be a buyer. This is one of the survivors.”
Holding graphic packaging (GPK) – Get the report: “No, this is too much of a commodity.”
Fuelcell Energy (FCEL) – Get the report: “No, that’s too speculative.”
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At the time of publication, Cramer’s Action Alerts PLUS had a position NVDA, MSFT, AMD, BA, HON, COST, SBUX, AMZN.