CNBC’s Jim Cramer said standards for tech stocks are changing, and beating earnings alone is no longer enough to sustain gains.
“When it comes to tech companies, it’s no longer enough to just get ahead and raise money,” the “Mad Money” host said. “You need a shortage. Otherwise, even if you’re one of the big dogs, your stock won’t get much love… reported after tonight’s close.”
On Wednesday, four giant tech companies alphabet, Amazon, metaand microsoft — Two of the four stocks fell in after-hours trading after earnings were reported. Kramer said the mixed reactions highlight the market’s emphasis on scarcity over scale.
“That’s strange,” he said. “There was a time when these four companies had unstoppable growth. Now, growth belongs to companies that sell in a limited number of areas.”
He cited meta as a key example. The company achieved the fastest rate of revenue growth in five years, but the stock still fell in after-hours trading as investors questioned the return on increased spending.
The contrast was stark compared to companies that reported earlier this week that they were benefiting from supply constraints.
seagate It rebounded after hinting at tight supply of data storage hardware related to data center demand. “We can’t make products fast enough,” Kramer said, pointing to limited manufacturing capacity.
bloom energyThe company’s electricity provider, which Mr. Kramer called one of his “favorites,” also soared, and Mr. Kramer noted that the company’s power system, which is increasingly used in data centers, remains undersupplied. Although Bloom is not a traditional technology name, it has become an important part of the broader AI trade as demand for data center-related energy infrastructure continues to grow.
NXP Semiconductors It jumped on an unexpected shortage of automotive chips, reversing a segment that had been lagging in the past. “Cars now have software-defined products, and NXP is a must,” Cramer says.
The shift underscores how investors are gravitating toward companies with limited supply and visible demand, even if they lack the scale of big-cap tech stocks.
“The bottom line is simple,” Kramer said. “Ironically, the best technology these days is old technology because we stopped making it and it became popular again.”
