CNBC’s Jim Cramer said Wednesday that investors should stop worrying about how much stocks have already gone up and instead focus on how much upside they still have left.
“Don’t worry about where the stock price was. Concentrate on where the stock price is going,” the “Mad Money” host said. “That’s becoming my watchword for this exploding market.”
His comments come as many of the market’s biggest winners, particularly artificial intelligence and data center stocks, continue to rise after posting strong gains already this year. Cramer said one of the biggest mistakes investors make is assuming a stock is “too expensive” just because it’s already gone up significantly.
“The lesson here is if you think a stock is headed up, don’t use where it comes from as an excuse not to buy it,” Cramer said.
For example, Kramer pointed out that: corningwhich is a holding of a charitable trust and a portfolio used by the CNBC Investment Club. After visiting the company’s Kentucky facility in September, Corning CEO Wendell Weeks said Corning made a compelling case for why fiber is increasingly replacing copper in data centers for speed, cybersecurity and durability.
problem? Corning stock had already risen to $77 from about $52 in July.
“What was my first reaction? I missed it,” Kramer said. “So I said, ‘No, this CEO’s beliefs were so fundamental and his knowledge of what could happen was so obvious. I had to buy it.'”
Investing Club began the position a few weeks later, on October 21st. The stock has more than doubled since then, supported by recent investments by Nvidia related to optical connectivity technology.
Kramer said he had to make a similar decision. arm holdingsanother club stock. Shares had already soared after the company officially announced its first self-designed CPU beyond licensing chip technology on March 24th. He said he believes this move will better position Arm for the rise of AI agents in data centers.
“I couldn’t resist the temptation,” he said. “I’ve decided enough, I’ll forget where it came from and just buy some.”
When the club acquired the stock on April 20, the stock price was approximately $173 per share, up from $135 before the CPU event. Arm has since risen above $300.
That’s why Cramer believes investors should focus on whether the business story still has room to develop, rather than how much the stock has already risen.
“You can’t afford to overlook a good stock just because it has risen more than expected,” he said.
