At Extreme Investor Network, we dive deep into all things money to provide you with expert insights that can help you make informed decisions and stay ahead in the ever-changing financial landscape. Today, we’re taking a look at the recent Big Tech sell-offs that caught the attention of CNBC’s Jim Cramer.
According to Cramer, investors may have been disappointed with earnings from tech giants like Alphabet and Tesla, leading to a sell-off in the mega caps. But what exactly spurred this sell-off, and what can investors learn from it?
Alphabet, despite reporting an earnings beat, saw its YouTube advertising revenue miss expectations. On the other hand, Tesla’s earnings fell short of Wall Street’s expectations, with automotive sales declining once again. However, Elon Musk’s narrative on self-driving technology and energy production did catch Cramer’s eye.
In the midst of this tech sell-off, Cramer highlighted the gains seen in small-cap stocks on the S&P 600 index. Companies like Fabrinet, ATI, Ensign Group, SPS Commerce, and Mueller are among those that have been surging as investors pivot away from mega caps.
“After today, many of the Mag Seven have gotten hammered so badly that they’re actually cheaper than almost all the small-cap stocks I just gave you on a price-to-earnings basis,” Cramer noted. “Until we work through this brutal rotation, that newfound cheapness probably won’t be enough to save the big caps — only lower prices will accomplish that.”
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