Jim Cramer told viewers to steer clear of new tech purchases and instead put money into industrials and financials, naming FedEx, Honeywell Aerospace, and Goldman Sachs as safer bets. The call comes as a packed earnings week approaches, with Intel, Tesla, and Alphabet set to report.
Cramer's latest stock picks
On his show, Cramer argued that the current market environment favors companies with tangible assets and steady cash flows over high-growth tech names. He specifically pointed to FedEx as a logistics play, Honeywell for its aerospace and automation business, and Goldman Sachs as a financial powerhouse. The advice marks a shift from his earlier bullish stance on tech.
Just last week, Cramer called Intel his favorite chip stock on July 15. Within hours, Intel shares dropped roughly 8%. That decline came even as ASML confirmed a manufacturing milestone, which should have been positive for the sector. Cramer also made a bullish call on Nike, which then crashed 15% shortly after. The pattern has not gone unnoticed.
Earnings season heats up
Intel reports on July 23, while Tesla and Alphabet report on July 22. Analysts expect Intel to post earnings of $0.21 per share, up from a $0.10 loss a year ago, with revenue of $14.4 billion — a 12% year-over-year increase. Alphabet is expected to report earnings of $2.87 per share, up 24.2% from last year, and Google Cloud revenue of $22.79 billion, a 67.3% jump.
Tesla delivered 480,126 vehicles in the quarter, beating estimates. Analysts expect revenue near $25.81 billion and earnings of $0.50 per share. But the stock trades at 177 times forward earnings, the highest multiple among mega-cap tech stocks. That valuation makes it a risky bet if earnings disappoint.
The Inverse-Cramer Effect
Wall Street has a running joke: the 'Inverse-Cramer Effect.' Traders sometimes profit by betting against Cramer's on-air calls. His recent track record — Intel down after his praise, Nike crashing after his bullish call — feeds the meme. Even his call to buy Nvidia during an AI chip selloff hasn't fully reversed the narrative.
So when Cramer tells viewers to avoid tech and buy industrials, some traders might do the opposite. The earnings reports this week will test whether his cautious stance is smart or just another contrarian signal.
Intel, Tesla, and Alphabet all face high expectations. If they deliver, tech could rally despite Cramer's warning. If they stumble, his picks might look prescient. Either way, the market will have an answer by the end of the week.
