Jim Cramer advises investors to remember the optionality of six of the Magnificent 7.

Jim Cramer advises investors to remember the optionality of six of the Magnificent 7.
Jim Cramer advises investors to remember the optionality of six of the Magnificent 7.
  • Jim Cramer advised investors to recall the immense flexibility of six of the Magnificent Seven.
  • Cramer stated that the Magnificent Seven possess the greatest optionality among publicly traded companies in history. Selling any of them would disregard their immense power.
After Hours
The market was due for a pullback, says Jim Cramer

During his Wednesday show, CNBC's Jim Cramer highlighted the optionality of six companies known as the "Magnificent Seven."

Cramer stated that the Magnificent Seven possess the greatest optionality among publicly traded companies in history. Selling any of them would disregard their immense power.

The seven stocks that have earned their name for their robust business foundations and exceptional performance during the recent market downturn are Tesla, Amazon, Meta, Apple, Microsoft, Alphabet, and Nvidia.

One way to observe market power is through Google's shares, which experienced a $5 increase on Wednesday following reports that the company may use AI to replace its large ad sales team.

Cramer believes that the workforce shift is justified due to the cost-effectiveness and efficiency of AI. Wall Street concurs. This led Cramer to consider how Google could restructure its business and increase its stock value through the use of AI.

Google is not the only company with lots of optionality in its business units. Similarly, companies like Amazon, Facebook, Microsoft, Apple, and Alibaba also have a lot of optionality. However, Cramer noted that Nvidia, being mainly a graphics card company, does not have the same optionality as the other companies.

Cramer stated that the other six companies are so large with numerous sections and parts that if they choose to split, eliminate a losing division, or sell something unnecessary, their stocks could increase by $42 billion, $50 billion, or $60 billion in a matter of seconds.

Cramer stated that these six members have the financial capability to maintain business units that are unpopular, and they have the option to spin them off or continue investing. Their advantage lies in their ability to choose either course of action.

Watch Wednesday's full episode of Mad Money with Jim Cramer — December 20, 2023

Join the CNBC Investing Club to receive updates on Jim Cramer's market moves.

by Jake Piazza

cnbc-tv