CNBC’s Jim Cramer on Monday rejected concerns of market cap concentration in the Magnificent Seven, saying they are tied together because of their high growth rates rather than their products.
“It’s growth that matters to stock investors, not the data center, not accelerated computing, not even artificial intelligence,” he said. “Growth is what the Magnificent Seven have in common and growth is what the market always loves.”
The Magnificent Seven — Amazon, Alphabet, Meta, Apple, Microsoft, Nvidia and Tesla — are some of the biggest names on the market, with artificial intelligence chip giant Nvidia recently becoming the first company to hit a valuation of $5 trillion.
Cramer said he understands that some may be inclined to avoid the tech megacaps and look for cheaper stocks. But he emphasized their continuous gains, noting that the tech-heavy Nasdaq Composite headed higher on Monday.
He highlighted Amazon’s recent stock moves and earnings results. While the company had been lagging behind its big tech peers, the stock soared 10% last week following a strong quarterly report that showed substantial growth in the AWS cloud division. Amazon added another 4% on Monday to close at a new record after it announced a $38 billion deal with OpenAI.
Despite the megcaps size, Cramer suggested Amazon and its peers are “putting up some of the best growth out there.” Growth stocks are often safe investments because they can withstand some macroeconomic woes, he added.
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Disclaimer The CNBC Investing Club Charitable Trust owns shares of Nvidia, Amazon, Microsoft, Meta and Apple.
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