Former hedge fund manager and CNBC’s Mad Money host Jim Cramer has dismissed fears that the stock market might be heading for another Dot-com style meltdown.
Cramer argued that the current market is supported by rational, business-driven narratives rather than pure speculation, he said on August 14.
The investor admitted that there are frothy corners of the market, citing the explosive rallies in newly listed cryptocurrency exchange Bullish, nuclear startup Oklo, and quantum computing firm D-Wave.
He compared these speculative moves to the late 1990s, when internet companies with no revenue or business plans went public and soared before collapsing. But unlike 1999, he insisted, froth does not define the broader market today.
“We are nothing like March of 2000 when the dot-com bubble officially burst. So don’t quit the market,” Cramer said.
Cramer’s stock picks
Regarding the stock picks, Cramer highlighted Amazon as a prime example of market strength. Its stock rose after announcing same-day grocery delivery, a move he said could disrupt Instacart, DoorDash, and Uber while shifting focus from cloud concerns back to Amazon’s retail dominance.
He also defended Eli Lilly, noting that after a selloff tied to weak weight-loss pill trial results, CEO David Ricks and other executives bought millions in shares. Cramer said this insider buying was a powerful vote of confidence in the company’s future.
Additionally, Cramer praised Charles Schwab after it reported a 17% jump in net new assets, calling the inflows ‘an amazing gain’ that justified the stock’s climb. He also pointed to Intel as another rational story, citing reports that the U.S. government may take a stake to strengthen its balance sheet and underline its strategic importance.
Even Palantir, one of the market’s most polarizing stocks, earned Cramer’s defense. While critics argue its valuation is excessive, he said earnings per share is the wrong metric.
By the ‘rule of 40,’ which balances revenue growth and profitability, Palantir looks ‘incredibly cheap.’ He added that its steady stream of government and private contracts proves it’s a rational long-term player, not just hype.
Notably, as reported by Finbold, Cramer has maintained that the stock is destined for a $200 target.
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