CNBC’s Jim Cramer on Thursday explained why he thinks certain Big Tech names wield unique power in the market.
“If you want to make money in the market, you have to recognize the megacap stocks are their own animals and don’t have to be linked to the federal funds rate,” he said.
He pointed in particular to semiconductor giant Nvidia , whose stock has skyrocketed quickly as companies clamor for its products amid the artificial intelligence boom. The AI powerhouse is worth more than $4 trillion, making it the most valuable company in the world.
Cramer suggested that Nvidia is not “hostage” to interest rates or even some issues within its own industry. Unlike Nvidia, he continued, much of the market is heavily affected by the Federal Reserve’s decision on whether to raise or lower the benchmark overnight borrowing rate. He also mentioned that Nvidia’s stock rallied on Thursday after it announced it would invest $5 billion in troubled chipmaker Intel . Cramer pointed out that Nvidia managed to see gains even as the company faces issues selling its chips in China, and he said there is more to the outfit than its business in that country.
But Nvidia is only “one of a handful of companies that seems very much in charge of its own destiny,” he said. He pointed to other members of the Magnificent Seven — Microsoft , Meta , Amazon , Alphabet , Apple and Tesla — which have largely led the market to record-breaking heights over the last few years.
“When you have a company like Nvidia that’s rolling in cash, why would you care about borrowing costs?” Cramer said.