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CNBC’s Jim Cramer warned investors on Friday to be cautious when it comes to the mega-cap tech stocks that have suffered this year.
“If we see these stocks run back to their previous levels… let’s remember that value is needed and we don’t want to get burned the next time it’s too high,” he said. “Right now, we’re looking for cheap stocks of companies that do things or do things profitably and return some of that profit to shareholders.”
Stocks rose on Friday but were still lower for the week as investors continued to worry about the recession.
Tech stocks have been hit this year by a series of price hikes, interest rate hikes by the Federal Reserve and the Covid-19 shutdown in China. Earlier this year, mega-cap tech names rose to stratospheric heights and were largely responsible for the market’s strength.
Tesla, Meta forums, Nivea, Amazon, Alphabet, Microsoft And Apple — all major stocks in the S&P 500 — lost $5.4 trillion in value, Cramer said.
While he doesn’t blame investors for betting on those stocks this year, he says he believes investors should learn from their mistakes in 2023.
“The next time we get a good rally from the broader index, you can run away, and I think we will have one. I think you should take that opportunity to reflect on mega-cap tech.” he said. “I guess you’ll get a chance to lower them a little.”
Disclaimer: Cramer’s Charitable Trust owns shares of MetaPlatforms, Amazon, Alphabet, Microsoft and Apple.
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