CNBC’s Jim Cramer said Wednesday that a handful of big tech companies have become so powerful that their influence extends far beyond their stock prices.
The “Mad Money” host likened them to “nation states,” noting their overwhelming competitive position, ability to generate large profits, and willingness to invest in emerging technologies. Identify the claimer alphabet, Amazon, apple, meta platform, microsoft, Nvidia, tesla, space x, human and OpenAI As a company that fits that description.
“Their influence is so extraordinary that ‘Mad Money’ can’t help but cover them,” he said.
Cramer’s Charitable Trust, a portfolio managed by CNBC’s investment club, owns stock in Alphabet, Amazon, Apple, Meta, Microsoft, and Nvidia.
Still, even these giants are not immune to broader market forces. Kramer compared it to an aircraft carrier, which is better equipped to withstand turbulent conditions than a small ship, but remains vulnerable to strong economic currents.
Those pressures were evident on Wednesday as oil prices rose on renewed concerns about a conflict with Iran, while Fed Chairman Kevin Warsh warned that inflation remained high and further rate hikes remained a possibility.
“I listened and I didn’t hear anything that would derail the biggest companies,” Kramer said.
Microsoft’s latest financial results provided a case in point. Shares rose 4% in after-hours trading after the software giant beat expectations for profit and revenue. Revenue increased 19%, and Azure cloud business growth accelerated to 48% from 42% in the previous quarter, beating expectations. Microsoft also demonstrated spending discipline, with capital expenditures and finance leases of $45.2 billion, below Wall Street expectations, despite continued investments in AI infrastructure.
“This is the winner of tonight’s two big Magnificent 7 reports,” he said, warning that Microsoft’s conference call and guidance could still change investor valuations.
Meanwhile, Alphabet’s results showed that even leading technology companies face risks. Shares fell 7% after Google’s parent company missed earnings and revenue expectations. Revenue rose nearly 25%, with Google Cloud revenue more than doubling, but its core search business fell short of expectations, raising new concerns about the impact of AI on Google’s advertising business. Free cash flow was also negative by $9.1 billion.
“Tonight we see why you would ignore these stocks at your peril,” he concluded. “Nothing has happened to shock us. There has been nothing to infuriate us. Alphabet will get a downgrade or two, and search could really take a hit. But what about Microsoft? It’s justifying the monster move that took it off rock bottom in late June earlier this year.”
