Why does Jim Cramer like technology stocks so much? Because he’s always innovating, he told Mad Money viewers on Monday.
In Monday’s session, we saw two more examples of innovation, one from semiconductor manufacturer Nvidia (NVDA) – Get the report and one from Microsoft’s technology titanium (MSFT) – Get the report.
There are two ways to excel in technology, Cramer explained. One way is innovation, which is what Jensen Huang, CEO of Nvidia, is known for. On Monday, the company updated analysts not only with new products, but also with a better-than-expected earnings announcement. Cramer said Nvidia doesn’t just challenge like Intel (INTC) – Get the report and Advanced Micro Devices (I HAVE D) – Get the report, has become the most valuable semiconductor company today. Nvidia remains a value game, even after the 5.6% launch of the stock on Monday.
Then there is Microsoft, which has shown investors the other way to excel in technology – acquisitions. Microsoft has announced the acquisition of Nuance for $ 16 billion. CEO Satya Nadella said Microsoft and Nuance will help doctors speed up documents to improve patient care.
Microsoft shares, which trade with gains 35 times, suddenly seem much cheaper, Cramer said, thanks to smart thinking and impeccable timing.
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Eyes on industries
Not all industrial stocks are equal, he reminded spectators. Some are excellent companies, he said, but others have excellent stocks.
Case in point, Boeing (nay) – Get the report versus Honeywell (SHE) – Get the report, two shares that Cramer holds for his charitable trust, Action Alerts PLUS. Honeywell fought last year during the pandemic, but the company was backed by a 30% increase in its security division, which includes personal protective equipment. Now that the economy is reopening, Honeywell has gained from growing its business in its HVAC, aerospace and specialty chemicals divisions. The stock received a couple of analyst improvements, sending stocks to new highs.
Then there is Boeing, which has announced another grounding of its troubled 737Max aircraft, which only recently returned to the air after 18 months on the ground. While the headlines of this latest recall look bad at first glance, Cramer said they are exactly what we want to see from Boeing. The electrical problem is minor and affects only 90 aircraft, however the company recommends a lot of precautions, even if the problem can be inspected and corrected in just a few hours.
That’s why Cramer said Boeing should be bought for this last weakness. Like Honeywell, it will benefit from economic reopening with strong orders and low interest rates.
Last restaurant standing
Because smaller businesses 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 may receive multiple analyst updates and price increases 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 great that those balance sheet and technology businesses are pivoting into our new world. Hundreds of thousands of restaurant closures have put Chipotle in a strong position in the market. The company was already a strong digital player and now, with the reopening of the dining rooms, it will become even stronger.
The same goes for the Yum brands (YES) – Get the report, Darden Restaurant (DRI) – Get the report and Cheesecake Factory (CAKE) – Get the report, Cramer added, along with Starbucks (SBUX) – Get the report, another winner in the digital realm.
In retail, Cramer told Costco (COST) – Get the report is one of the last businesses standing. The retailer just recorded sales in the same store that increased by 11%, shocking analysts who assumed that sales will slow down. 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.
Out of the band
In his “Off The Tape” segment, Cramer sat down with Zach Bruch and Trevor George, co-founders of RECUR Private, a company that capitalizes on the new trend of NFTs or non-fungible chips.
Bruch explained that NFTs are digital assets that use blockchain technology to prove ownership. They are unique pieces of digital goods that are unique and last forever. George added that NFTs can be anything to collect, but their usefulness will come later as communities are built around these assets.
When asked about the possibility of a bitcoin crash in NFTs, Bruch noted that an accumulation and a crash may occur, because NFTs are new assets with much speculation. But, he noted, as they mature, brands will begin to figure out how to make the best use of them and will eventually represent real value.
Fed vs. inflation
In his “No Huddle Offense” segment, Cramer commented on the prospect of the Federal Reserve raising interest rates to reduce inflation. He said sooner or later the time will come when Jay Powell will have to gather. But when this happens, it does not mean that the stocks will be destroyed.
Although it is true that when Janet Yellen raised rates prematurely in 2015, the markets were severely affected. But sometimes it took months, even years, for the actions to start reacting. That was the case in 2004 and 2008, he said, and it could be the case again this time.
But it is far too early to start worrying about interest rates. Without tangible signs of permanent, not transient, inflation, there is simply no need to raise interest rates, exactly what Powell has told us about every chance he has.
Lightning round
Here’s what Cramer had to say about some of the actions the callers offered during the “Crazy Lightning Round” on Monday night:
Cisco Systems (CSCO) – Get the report“I think I’m going higher.”
AT&T (T) – Get the report: “Vinde, vinde, vinde.”
Ruth’s Chris Steakhouse (RUTH) – Get the report: “I would be a buyer. This is one of the survivors.”
Owning graphic packaging (GPK) – Get the report: “No, this is too big 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.