CNBC’s Jim Cramer on Friday warned investors to exercise caution when approaching mega-cap tech stocks that have been hammered this year.
“If we see these stocks crawling back to their old levels… Let’s remember that prices 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 things for a profit and return some of the profits to shareholders.”
Stocks rose on Friday but were still down for the week as investors continue to worry about a potential recession.
Technology stocks have been hammered this year by persistent inflation, the Federal Reserve’s interest rate hikes and the Covid shutdown in China. Before this year, mega-cap tech names rose to stratospheric heights and were largely responsible for the market’s strength.
Tesla, Meta platforms, Nvidia, Amazon, Alphabet, Microsoft and apple — all major stocks in the S&P 500 — lost a combined $5.4 trillion in value, according to Cramer.
He said that while he doesn’t blame investors for betting on these stocks this year, he believes investors need to learn from their mistakes in 2023.
“They’ll be able to bounce the next time we get a good rally in the broader index, and I think we’re going to have one. I think you should use that chance to get back into mega-cap tech,” he said. “I bet you get a chance to buy them a little lower.”
Disclaimer: Cramer’s Charitable Trust owns shares in Meta Platforms, Amazon, Alphabet, Microsoft and Apple.