CNBC’s Jim Cramer on Monday laid out the five major investment themes he expects Wall Street to throw its weight behind for the remainder of 2021.
“I like to say that this is the time of year where winners become anointed,” the “Mad Money” host said, explaining that it means “the big institutional money managers … make up their minds about what worked in 2021 and what didn’t.”
“Once they make up their minds, they won’t allow anything to shake them out. Not the Fed, not this week’s non-farm payroll report. If the past is any guide, then for the next two months, these groups … will be borderline unstoppable,” Cramer added.
Here are the themes Cramer highlighted:
Future of automobiles
Cramer said he believes stocks tied to electric vehicles, plus advanced driver assistance, are not going anywhere.
“Tesla’s the most straightforward way to play it. … You may want to think about Lucid, which is launching its own electric car, could be a substitute, but I’d prefer to stick with the real thing,” Cramer said.
Cramer also said ON Semiconductor “has solidified its place as the must-buy chipmaker to the auto industry,” noting that the company’s CEO, Hassane El-Khoury, called out demand from car companies on its third-quarter earnings call earlier Monday.
“I also like NXP Semi,” Cramer added.
Many companies appear serious about taking steps to combat climate change right now, Cramer said, capitulating alternative energy plays into the investment spotlight.
“I’ve been a huge believer in hydrogen fuel cells … even though we don’t have a way to produce clean hydrogen on the cheap. Plug Power makes these fuel cells and its stock broke out today, jumping nearly 9%,” Cramer said. “While it’s still a revenue story, not an earnings story, I’m betting that the clean energy believers will keep buying this one through the end of the year.”
On the solar panel front, Cramer called out Enphase Energy as the name to buy in the near term.
Some people remain skeptical of the so-called metaverse, a term used to describe a digital world in which people use devices to interact, Cramer acknowledged. However, he said stocks that benefit from the future development of the metaverse — such as Meta, the company formerly known as Facebook, as well as chip designer Nvidia and video game software firm Unity — have been strong performers.
“I’d like to come up with a better name for this concept, but what matters is that Wall Street has anointed it, so it works for the next two months at the very least,” Cramer said.
Cramer said the digital transformation toward cloud computing remains in full force, benefiting the likes of semiconductor firms Nvidia and AMD, Microsoft because of its Azure unit and Salesforce with its cloud-based sales and marketing software.
Additionally, Adobe’s creativity software and Snowflake’s data-analytics software position those companies as beneficiaries into year-end, Cramer said.
Oil and gas
“Even if oil and gas prices come down, they’re going to buy these stocks. I doubt crude will sink to the $60s [per barrel] before the end of the year,” Cramer said, pointing to Chevron for its dividend and Pioneer Natural Resources and Devon Energy for their “variable dividends and good growth.”