CNBC’s Jim Cramer on Monday warned investors against dumping blue-chip stocks in a market driven by fear rather than fundamentals.
“Stock prices go down for a variety of reasons, some good, some bad. A lot of bad has happened lately, and I want to make some things right tonight,” Kramer said on “Mad Money.” “This is because bad tapes cause individuals to sell out of blue-chip stocks when they normally should have bought more.”
Stocks reversed early gains and mostly fell on Monday, ending just below the low of the session. The S&P 500 and Nasdaq finished down 0.39% and 0.73%, while the Dow Jones Industrial Average rose 0.11%.
Cramer said that while the broader market has given up early gains despite the rise in oil prices, the bigger issue is the disconnect between stock price movements and underlying business realities, particularly in technology.
He cited cybersecurity as an important example. Concerns that private AI company Anthropic’s artificial intelligence could replace traditional cybersecurity companies have weighed on the company’s stock price. palo alto networks and cloud strike.
“That’s just not true,” Kramer said. “The reality is that the rise of AI should be a boost for Palo Alto and CrowdStrike, because these same AI agents can be programmed by hackers to take over networks with ease. Those are the vulnerabilities. Without the help of traditional cybersecurity, they will be more vulnerable than ever.”
He explained that insider confidence strengthens that view, pointing to Palo Alto CEO Nikesh Arora’s recent purchase of $10 million worth of stock. “I don’t think a CEO who believes AI is an existential threat to their business model would buy $10 million worth of stock,” Cramer said.
Mr. Kramer also mentioned the sharp decline of social media giants. meta platform They argue that investors are overreacting in the wake of recent legal rulings.
“I thought it was strange to see a sale based on a lawsuit like this,” he said, adding that such lawsuits are often overturned on appeal.
His conclusion is: “Sometimes stocks sell for bad or completely bogus reasons. When that happens, I want to be a buyer, not a CrowdStrike or Meta seller.”
