Cramer Says 'Hot Money' Flowing From Nvidia, Apple Into China, Focus On Alibaba 'If You Must'

Jim Cramer is sounding the alarm, but not in the way you might expect. For those bullish on Nvidia Corp NVDA and Apple Inc AAPL, Cramer's latest take might be hard to swallow.

Hot Money Streaming Out Of Nvidia, Apple

In a tweet, Cramer said, “The hot money is streaming out of Nvidia and Apple and into China. Let it stream. Do not defend these now. Let this money leave. On China only BABA has actual fundamentals if you must… But let it rain here. Get all of these short Nvidia options and ETFs to play out.”

The hot money is streaming out of Nvidia and Apple and into China. Let it stream. Do not defend these now. Let this money leave. On China only BABA has actual fundamentals if you must.. But let it rain here. Get all of these short Nvidia options and etfs to play out..

— Jim Cramer (@jimcramer) October 2, 2024

The reasoning? Cramer hints that Nvidia's sky-high valuations and Apple's post-iPhone slump might leave them vulnerable to short-term pain. If you’re holding Nvidia options or ETFs, Cramer believes you might want to ride the short wave.

Cramer’s suggestion is a subtle signal that a pullback could be looming, especially as investor sentiment shifts and valuations begin to look more stretched than a Friday-night binge-watch.

The GraniteShares 2x Short NVDA Daily ETF NVD and the Direxion Daily NVDA Bear 1X Shares NVDD are inverse ETFs positioned to gain on Nvidia stock’s underperformance. Investors in the Direxion Daily AAPL Bear 1X Shares AAPD gain when Apple shares underperform.

Read Also: Despite Nvidia Selloff, Biden’s Law and Taiwan Semi’s Advantage Offer Growth Potential

Only Alibaba Has Actual Fundamentals, Says Jim Cramer

Meanwhile, where should the more adventurous traders look? According to Cramer, only one Chinese juggernaut is worth considering amid the capital outflows into China: Alibaba Group Holdings Ltd BABA BABAF.

The e-commerce giant, despite facing regulatory hurdles, is backed by solid fundamentals. The GraniteShares 2x Long BABA Daily ETF BABX provides leveraged exposure to Alibaba shares. Other ETFs with substantial allocation to Alibaba shares in their portfolio include the iShares MSCI China ETF MCHI (8.96% Alibaba stock), iShares China Large-Cap ETF FXI (9.03% Alibaba stock) and the KraneShares CSI China Internet ETF KWEB (11.05% allocation to Alibaba stock).

If you must dip into the Chinese markets, BABA might be your best bet—just don't expect smooth sailing.

Cramer's latest recommendation suggests patience with Nvidia and Apple, letting short sellers have their moment, and keeping a cautious but interested eye on Alibaba's potential for a rebound.

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