CNBC’s Jim Cramer told investors to continue staying away from tech stocks, even after their gains on Monday.
“Just remember, if you were buying tech here off some weaker macroeconomic numbers, you’re not investing, you’re simply gambling,” he said.
The tech-heavy Nasdaq Composite marked its second day of gains on Monday after fresh economic data from the week before raised hopes that inflation is easing and the Federal Reserve could slow its pace of interest rate hikes.
The Dow Jones Industrial Average and S&P 500 both fell, though gains in the latter’s information technology sector helped minimize losses.
“These short-term sector rotations like we saw today — they’re irrelevant because they can’t last. Think renters, not owners. The fundamentals, now they last,” he said.
In other words, tech stocks remain overvalued in a market that will continue to see pain, despite its recent gains, Cramer explained. He said tech companies whose stocks soared will likely have to cut expectations when they report earnings, which means their stocks will fall.
Cramer reiterated his stance that investors should suit up with recession-resistant stocks in sectors such as health care, industrials, oil and aerospace.
“They were clobbered by the end of the day, and I think many of them actually represented some great [buying] opportunities,” he said.