Here’s how Jim Cramer would invest in a possible rally in cloud stocks


CNBC Jim cramer on Monday he detailed an investment strategy for a group of cloud software stocks, after the cohort was hit hard by an industry turnover on Wall Street.

the “Bad money” host and his team compiled 50 stocks in the cloud space, from heavyweights like Sales force mature players like Octa and recent IPOs such as AppLovin other UiPath. All but one of the companies analyzed fell more than 10% from their highs at the close of Friday. The average decline at the time was 33%, Cramer said.

Cramer said the recent sell-off is reminiscent of a period in late 2018 that turned out to be a good buying opportunity for many cloud companies. However, he stressed that it is unclear when this period of weakness will disappear and there could be more pain in the future.

For that reason, Cramer said investors looking to try to capitalize on the decline should focus their attention, for now, on those with “reasonable valuations.”

“Eighteen of the 50 names on our cloud list have single-digit price-to-sales ratios … which I have no problem with,” he said. “That includes Cramer-fave, which is owned by my charitable foundation, and fellow king of the cloud. VMWare. “

New Relic, which makes software that helps companies track applications to identify and resolve bugs, is another action to consider right now, Cramer said. The stock had been a history of change before the sell-off at the end of the year, he said.

“In short, if you want to start picking through the rubble of cheap cloud stocks, well, these are down low enough that it’s worth buying very gradually,” Cramer said.

The additional stock seems reasonably priced when you consider the 2023 sales estimates, Cramer said, which is fair “because in one month, 2023 will be next year.” Of those eight companies, Cramer said Workday, Five9 and Twilio are “the ones I like.”

Register now for the CNBC Investing Club to follow all of Jim Cramer’s movements in the market. Disclosure: Cramer’s charitable trust owns Salesforce stock and


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