Jim Cramer says these tech giants can weather market turbulence - CNBC
CNBC's Jim Cramer said Wednesday that a handful of technology giants have become so powerful that their influence extends far beyond their stock prices.
The "Mad Money" host likened them to "nation states," pointing to their dominant competitive positions, ability to generate substantial profits and willingness to aggressively invest in emerging technologies. Cramer identified Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, SpaceX, Anthropic and OpenAI as companies fitting that description.
"Their heft is so extraordinary that 'Mad Money' cannot go without covering them," he said.
Cramer's Charitable Trust, the portfolio run by CNBC's Investing Club, owns shares of Alphabet, Amazon, Apple, Meta, Microsoft and Nvidia.
Still, even these giants aren't immune to broader market forces. Cramer compared them to aircraft carriers β better equipped to withstand turbulent conditions than smaller vessels, but still vulnerable to powerful economic currents.
Those pressures were evident Wednesday as oil prices climbed with renewed concerns about the conflict with Iran, while Fed Chairman Kevin Warsh warned that inflation remained elevated, leaving the possibility of further rate hikes on the table.
"I listened and I didn't hear anything that could derail the biggest companies," Cramer said.
Microsoft's latest earnings offered a case in point. Shares climbed 4% in extended trading after the software giant topped earnings and revenue expectations. Revenue rose 19%, while its Azure cloud business grew 48%, accelerating from 42% in the prior quarter and exceeding expectations. Microsoft also demonstrated spending discipline, with capital expenditures and finance leases of $45.2 billion coming in below Wall Street's forecasts despite continued investment in AI infrastructure.
"This was the winner from tonight's two big Magnificent 7 reports," he said, while cautioning that Microsoft's conference call and guidance could still change investors' assessment.
Alphabet's results, meanwhile, demonstrated that even dominant technology companies face risks. Shares slumped 7% after the Google parent missed earnings and revenue expectations. Although revenue grew nearly 25% and Google Cloud sales more than doubled, its core Search business fell short of estimates, raising fresh concerns about AI's impact on Google's advertising business. Free cash flow was also negative $9.1 billion.
"Tonight, we saw why you ignore these stocks at your own peril," he concluded. "We saw nothing that shocked us. Nothing that enraged us. Alphabet's going to catch a downgrade or two, search could really be hurting. But Microsoft? It's justifying its monster move off the bottom back at the end of June earlier this year."
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