Main Points
- Jim Cramer from CNBC presented an investment case for five legacy technology businesses that he believes would do well in 2022 on Friday.
- Apple, Cisco, IBM, Microsoft, and Oracle were all mentioned by the “Mad Money” host.
- According to Cramer, even when the Fed tightens policy, such firms should function well.
Cramer believes that “there are plenty of tech names that create actual goods and earn real profits” that can outperform the tightening of monetary policy. The majority of the money-losing cloud-based software equities have been removed from the market. “What you need here are tedious higher organizations, the kind sarcastically described as ‘old tech.”
Apple
Cramer said, “Inspite of the 34% increase in the stock from the last year, the tech catastrophe has recovered it back 10 dollars from its highs at the start of this week.” “You have to seek advantage of a buying opportunity like this with Apple.”
Cramer believes that after supply-chain difficulties are resolved, customers will be able to unleash pent-up demand, which Apple would profit from. Furthermore, the iPhone maker’s “monster” share repurchase program is more favorable in light of the Fed’s tightening stance.
Cisco
According to Cramer, Cisco’s stock has been rising since late November as investors have begun to ignore the company’s recent quarterly reports. “Demand was high in the previous two quarters. “We’re witnessing a spike in business technology investment; the issue was the supply chain crisis,” Cramer said, praising the computer networking company’s shift into software and the recurring income gains that come with it. “CISCO’s CEO expects things to raise in the second half of the fiscal year of company, and Cramer is responsible to trust him.
IBM
Cramer said he would not be shocked if IBM’s price drops once the firm announces earnings in a few weeks, but he sees the stock as a long-term winner.
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Cramer added, “I am still in love with IBM for two reasons: it’s cheap trading at earning of 12 times, and they’ve preserved their pre-breakup dividend, giving the company a yield of 4.9%”.
He also supports Arvind Krishna’s “aim to unlock value at whatever costs.”
Microsoft
“This one raised to almost around 51% previous year, but considering the recent sell-off, you have a great buying opportunity here.” The stock has descended to 10% since its November peak. “That doesn’t occur usually,” Cramer added. “When the Fed starts criticizing on the brakes to drop the economy, it is a kind of practical tech tale that should work.”
Oracle
Cramer believes Oracle’s stock is still inexpensive even after its breakthrough in 2021. The most recent quarter for the business software behemoth was “phenomenal.” The stock has lost its post-report gains, owing in part to Wall Street’s sour reaction to Oracle’s ambitions to acquire Cerner.