CNBC’s Jim Cramer on Friday warned investors to be cautious when investing in mega-cap tech stocks that crashed this year.
“If we see these stocks creeping back up to their old levels. … Let’s remember that prices do matter, and we don’t want to get burned the next time they go too high,” he said. “Right now, we want cheap stocks of companies that make things or do stuff at a profit and return some of those profits to shareholders.”
Stocks soared Friday but were still down for the week as investors continue to worry about a looming recession.
Tech stocks have been hammered this year by inflation, the Federal Reserve’s interest rate hikes, and Covid shutdowns in China. Before this year, mega-cap tech names skyrocketed to meteoric heights and were primarily responsible for the market’s strength. Tesla, Meta Platforms, Nvidia, Amazon, Alphabet, Microsoft and Apple — all significant stocks in the S&P 500 — lost a combined $5.4 trillion in value, according to Cramer.
“They’ll be able to bounce the next time we get a nice rally in the broader index, and I think we’re going to have one. I think you should use that chance to pare back on mega-cap tech,” he said. “I bet you’ll get a chance to buy them a little lower.”
