Cramer Recommends These Stocks As Tech Falls Out Of Favor: 'A Lot Going For Them'

Zinger Key Points
  • Jim Cramer says the tech sell-off will likely continue until companies reevaluate priorities.
  • They should move a “growth at all costs mindset” to a “profitability at some costs” mindset, he says.
Cramer Recommends These Stocks As Tech Falls Out Of Favor: 'A Lot Going For Them'

Tech stocks have led the stock market rout this year, as reflected by the nearly 30% plunge by the Nasdaq Composite Index, and valuations of some have turned extremely attractive.

What Happened: Despite some tech companies remaining profitable and their stock looking like bargains, investors are better off positioning themselves elsewhere, CNBC “Mad Money” host Jim Cramer said on Tuesday.

While investors may think tech stocks couldn’t get any lower, there is the possibility of these going even lower until they get to zero, he added.

“Why rubberneck when you can invest in stocks of companies that have a lot going for them? I think that’s much better than sifting through the wreckage of tech simply because their stocks are down a great deal,” the stock picker said.

Cramer said tech companies need to reevaluate their priorities and move from a “growth at all costs mindset” to a “profitability at some costs” mindset.

These stocks have been battered by the Fed’s interest rate hikes, the Russia-Ukraine war and the COVID-19 lockdowns in China, he noted.

See Also: 'Darker Macro' Awaits As Amazon, Google, Meta Forced To Cut Costs After 'Hypergrowth' Phase: Analyst Says What's Next For Tech Stocks

Cramer recommended pivoting away from techs and into the following sectors:

  • Industrials
  • Foods
  • Pharmaceuticals
  • Oils

Food and pharmaceutical stocks are defensives that do well irrespective of the state of the economy. Crude oil prices have pulled back significantly amid demand worries in the wake of geopolitical tensions in China and Europe but analysts have painted a positive picture, heading into 2023.

Price Action: The Technology Select Sector SPDR Fund XLK ended Tuesday's session down 0.98% at $129.46, according to Benzinga Pro data.

Read Next: Best Technology Stocks To Buy

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