Boring stocks win when oil goes higher because of Iran war, says Jim Cramer
Speakers
Jim Cramer
— Host, Mad Money
Summary
Jim Cramer argues that boring stocks like Dow, Mosaic, and Valero rallied on Iran/oil fears but are not sustainable, and he advises against chasing them. Instead, he sees beaten-down tech as a better opportunity near a buying zone, with Meta's recent monetization of excess compute capacity exemplifying how quickly tech can deliver gains. The Dow, S&P, and Nasdaq all declined in the session.
- Dow, Mosaic, Valero, and dollar stores rallied on Iran-Persian Gulf tensions spiking oil.
- Cramer says not to chase those short-term winners for the long term.
- Technology stocks have been clobbered and are now very near the buying zone.
- He believes the tech sector is robust relative to other groups.
- Meta's announcement on selling excess compute added nearly 100 points.
- PepsiCo's decline and earnings miss crushed investors, contrasting with tech's sudden gains.
- The S&P 500 lost 0.79% and the Nasdaq fell 1.55% in the session.
Ideas
Don't chase boring winners long-term.
When Iran threatens to shut down the Persian Gulf and oil spikes, boring stocks like Dow, Mosaic, and Valero rally temporarily, but these moves are event-driven and not sustainable for long-term investors, so chasing today's winners is a mistake.
Circle back to tech, it's resilient.
Technology has been beaten down and is now very near a buying zone. The sector is robust relative to other groups, and positive catalysts can appear suddenly even amid geopolitical worries like Iran, making this an opportune time to rotate back into tech.
Meta monetizes excess compute, upside remains.
Meta Platforms is unlocking significant value by monetizing its excess compute capacity, a move that has already added nearly 100 points to the stock this month, and they still need to sell more of that capacity, pointing to continued upside.
