Cramer Weighs In On Whether Alphabet Is Worth $1 Trillion

Google parent company Alphabet Inc GOOG GOOGL continues to inch toward the $1 trillion valuation milestone but the recent run isn't based on anything new, CNBC's Jim Cramer said Monday.

Two companies that have already established membership in the $1 trillion club, Apple Inc. AAPL and Microsoft Corporation MSFT, are off to a strong start in 2019. Alphabet stock is already up more than 5% in 2020, and its market capitalization has expanded to around $990 million.

The move higher in all three names isn't based on anything fundamental, but is rather due to pure momentum, Cramer said Monday on "Mad Money." This is consistent with the broader tech sector, but isn't necessarily a reason for investors to celebrate, he said.

The $1-Trillion Club

The main problem among the elite group of $1 trillion companies: they face tremendous pressure in upcoming earnings reports to justify the valuation, Cramer said.

A small earnings beat of just a few pennies will be considered a disappointment, the CNBC host said, adding that companies need to report a "super beat" or their stock could come under pressure.

"I don't know if that's even possible," he said.

Apple is scheduled to report fiscal first-quarter results Jan. 28 after the market close, while Alphabet's report is scheduled for Feb. 3 after the close.