CNBC’s Jim Cramer said the bar for technology stocks has shifted and simply beating earnings is no longer enough to sustain a rally.
“When it comes to tech companies, it’s not enough just to beat and raise anymore,” said the “Mad Money” host. “You need a shortage, or else your stock’s not gonna get much love, even if you are one of the big dogs … that reported after the close this evening.”
On Wednesday, four mega-cap tech companies — Alphabet, Amazon, Meta, and Microsoft — reported results, with two of the four declining in after-hours trading. Cramer said the mixed reaction highlights a market that is increasingly rewarding scarcity over scale.
“It’s odd,” he said. “There was a time when all four of these companies would have unstoppable growth. Now the growth belongs to those who sell into constrained areas.”
He pointed to Meta as a key example. The company delivered its fastest revenue growth in five years, but shares still fell in extended trading as investors questioned the return on its rising spending.
The contrast was sharp compared with companies reporting earlier in the week that are benefiting from supply constraints.
Seagate rallied after signaling tight supply in data storage hardware tied to data center demand. “They can’t make their product fast enough,” Cramer said, pointing to limited manufacturing capacity.
Bloom Energy, which Cramer called one of his “favorites,” also surged, with Cramer noting its power systems — increasingly used for data centers — remain in short supply. While not a traditional tech name, Bloom has become a key part of the broader AI trade as demand for energy infrastructure tied to data centers continues to grow.
NXP Semiconductors jumped on an unexpected shortage in automotive chips, a reversal for a segment that had previously lagged. “Now that cars are filled with software-defined product, NXP is a must,” Cramer said.
The shift underscores that investors are gravitating toward companies with constrained supply and visible demand, even if they lack the scale of mega-cap tech.
“The bottom line is simple,” Cramer said. “The best tech these days is, ironically, old tech because we stopped building it and it came back into vogue.”
