Investors should consider taking profits in soaring tech stocks like Zoom Video Communications (NASDAQ: ZM) and Cloudflare (NYSE: NET), which have been among the market’s biggest winners amid the raging COVID-19 pandemic, said CNBC’s Mad Money host Jim Cramer on Monday.
According to Cramer, Zoom, Cloudflare, and other “red-hot growth names” are “absolutely worth owning into this weakness, although if you’re up huge, remember it is a sin to let a gain turn into a loss.”
While the American television personality, who has analyzed 15 stocks that trade at more than 30 times sales estimates for 2021, said these high-flying technology stocks are worth holding on to, it raised some eyebrows over valuation concerns.
“Back at my old hedge fund, we used to call these high-flyers ‘red hots.’ It means you can make a lot of money if you time it right, but if you get it wrong, you’re going to get singed, if not burned,” he said.
People have turned to videoconferencing and other online platforms in the last months due to the impact of the COVID-19 pandemic, marking a so-called ’new normal’ across industries.