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Cramer cites Nvidia for ‘well-deserved premium’ of tech stocks

BusinessCramer cites Nvidia for 'well-deserved premium' of tech stocks

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CNBC’s Jim Cramer on Tuesday reiterated his faith in tech stocks, especially Nvidia and its “Magnificent Seven” peers.

Cramer recognized that some investors question how tech shares could be worth so much money, especially when the stock is up. He has shared that skepticism, Cramer acknowledged, especially at the start of his career when similar doubts about the value of tech stocks were prevalent.

A cover story he read in Money Magazine forty years ago about the value of tech stocks helped change his mind, Cramer said. A money manger wrote the article and suggested that tech would roar back after sell-offs. Cramer was initially doubtful of this theory until he saw it prove true, he said.

According to Cramer, this shift in mindset led him to bring Microsoft to Goldman Sachs as well as other tech stocks he considered winners, like Apple and Nvidia.

“Tech has a well-deserved premium because of stocks like Nvidia,” he said. “Sure, you can sell the stock here. Maybe you’ll even look like a genius if it sells off tomorrow when it reports. But people doubted Microsoft every step of the way, too. They thought it was ridiculously overvalued and couldn’t justify paying up. That’s how they missed one of the best runs in history.”

Today we see the same thing as 40 years ago, tech with a monster P/E premium, says Jim Cramer

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia, Apple and Microsoft.

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