CNBC’s Jim Cramer on Thursday predicted the market will continue to broaden through January, suggesting the “Magnificent Seven” tech stocks may take a back seat on Wall Street. He said he’s had “an explosion of positive ideas from every nook and cranny of the market” since the new year started.
According to Cramer, the market is no longer distinctly split into two distinct sectors — the tech giants and smaller capitalization stocks. While there may not be a “total convergence” of the two groups — the Magnificent Seven are just too big — the rest of the market may get stronger, he suggested.
Cramer said he thinks stocks from a variety of sectors will see larger percentage gains than the Big Tech outfits.
“I always tell people to remember that, in the end, we’re trying to make our money work for us,” Cramer said. “To do that you need to buy stocks that go up a great deal, not just incrementally. And the Magnificent Seven now feels very incremental, mixed with some rather upsetting slides down.”
Analysts are making more recommendations outside of Big Tech, Cramer said, bringing different names to the forefront. For example, Wells Fargo recommended Home Depot on Thursday, and Barclays upgraded the stock. Barclays also got behind Dollar General, which performed poorly in 2023. Cramer also cited Wolfe Research’s upgrade of General Motors and Verizon, the latter of which had been a “first-rate pariah” on Wall Street.
“I expect that this change in leadership will only get more pronounced as the month goes on, because analysts are seeing non-tech stocks react to their recommendations,” Cramer said. “After years where their ideas were almost irrelevant as the Magnificent Seven dominated no matter what, they’ve now rediscovered their own relevance.”