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Market about to rotate into ‘these’ stocks, says Cramer

Thursday, 25 Jul 2013 | 6:01 PM ET
Don't get too comfortable
Thursday, 25 Jul 2013 | 6:00 PM ET
Mad Money host Jim Cramer dissects today's market action, and shares his latest stock picks. "Take advantage of the weakness in Google," he says.

(Click for video linked to a searchable transcript of this Mad Money segment)

"This market loves to change its stripes," noted Cramer. And they're changing right now.

Cramer thinks that money is about to rotate in a big way.

And he sees it going into Internet stocks after Facebook results completely transformed the landscape

The Catalyst For Rotation

"Facebook delivered one of the most amazing quarters I have ever seen," Cramer exclaimed with customary enthusiasm. "After Facebook reported earlier this week, the company emerged, in one fell swoop, as the new king of mobile, of social and of the cloud."

Cramer called that the 'Holy Trinity' of Internet.

"Given that Facebook doesn't have to pay for content and that advertisements can be tailored to the customer, you are seeing consumer product companies and local businesses throw money at Facebook," Cramer added.

Cramer has long been an advocate of holding Facebook and he believes the latest results confirm his outlook and more.

Much more.

"I expect the results to ignite the whole social media cohort," Cramer said, as investors bet on other companies that could also begin to harness the promise of new media.

Adam Jeffery | CNBC

Follow the Flow

In fact, Cramer thinks the rotation has already started to happen.

"In the wake of Facebook, LinkedIn has already rallied huge," as a bet LinkedIn may be another Internet powerhouse in its infancy. "The Facebook results also led a rally in Netflix; the Street regards Netflix as a terrific cloud and mobile—at least mobile-tablet play."

The same is true for Priceline, Zillow, HomeAway and Yelp. "I think this group is a terrific long-term theme and it has spent enough time in the wilderness," Cramer said.

Of course, if money is going into new media, it's got to be coming from somewhere.

And Cramer thinks that's housing.

"We saw some disappointing numbers from two homebuilders. Horton and Pulte and it created a torrent of selling in everything housing and housing related," Cramer explained.

"Now, I remain a long-term bull on housing given that we aren't building enough homes to meet demand. But we now know that the huge increase in mortgage rates, even off a generational low, has crimped demand."

All told, Internet is hot and housing is not.

And Cramer sees every reason for the trend to continue. That's the new reality of the market. "The pendulum has swung and the cloud, social mobile universe is falling into favor."

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Read More from Mad Money with Jim Cramer
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If you agree with Cramer's observations, the Mad Money host has a few suggestions for putting money to work.

"I'd take advantage of the weakness in Google. I like Facebook. And I'd circle back to the company that pioneered the whole 'Holy Trinity' of social, mobile and the cloud, Salesforce.com.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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FB
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LINKEDIN
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The Priceline Group
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Z
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AWAY
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YELP
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DHI
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PHM
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GOOGL
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