CNBC’s Jim Cramer has indicated that the recent market sell-off, particularly in the Big Tech sector, may have come to an end.
What Happened: Cramer, the host of “Mad Money,” suggested that the market may have bottomed out, citing the recent rally in the averages on Monday. He highlighted the losses experienced by several tech giants, including NVIDIA Corp NVDA and Microsoft Corp MSFT, over the past few months, reported CNBC.
“I think the sell-off could finally be over,” he said. “Stop waiting for a correction to give you better buying opportunities, we just had one for heaven’s sake.”
Despite concerns over the Federal Reserve’s next interest rate decision, Nvidia’s stock was impacted. However, the company’s announcement of a promising new graphics chip led to a rebound. Microsoft also experienced a decline but rallied after strong earnings and cloud business success.
Cramer acknowledged that some might view his analysis as cherry-picking, but he insisted that he is focusing on equities that were previously considered “the great growth stocks of the era” until the market shifted in March.
Why It Matters: The recent market sell-off has been a cause for concern among investors, with major U.S. pension funds shifting their investment allocations away from equities. For instance, the California Public Employees’ Retirement System (CalPERS) decided to decrease its stock allocation from 42% to 37% of its $494 billion fund in March.
Earlier in April, Cramer had warned that the upcoming Big Tech earnings could determine the market’s future. He specifically highlighted Nvidia’s performance, which experienced a 4% rise following a 10% drop, and cautioned that the stock’s recovery might not be enough to offset the losses.
However, Nvidia’s AI infrastructure is in high demand, as evidenced by the increased capital expenditures of its major clients. This demand, coupled with the company’s promising new graphics chip, could be contributing to its recent rebound.
Microsoft, on the other hand, has been making significant investments in AI, pledging a $1.7 billion investment in Indonesia’s cloud services and AI over the next four years. These investments, along with the company’s strong earnings and cloud business success, may be contributing to its recent recovery.
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