Why Cramer Likes Google More than Apple Right Now
“Mad Money” host Jim Cramer might have surprised some viewers Monday when he admitted it’s become more difficult to own shares of Apple than it is to own Google’s stock.
“The expectations for Apple have gone insane,” Cramer complained. “What people demand of Apple at this point is, quite frankly, ludicrous.”
To illustrate his point, Cramer pointed to recent press reports, which asked whether Apple will be the first company ever to be valued at $1 trillion. Another article noted that while Apple’s iPhone 5 sales topped 5 million, it still missed some estimates.
(Read More: Apple Says More Than 5 Million iPhone 5s Sold.)
“The set-up is just too much for people and given the huge rally in the stock, it makes all the sense in the world for Apple to go down,” Cramer said. “Who can live up to either data point? It’s nuts!”
Few seem to care about the expectations for Google, however, Cramer said. In turn, the Internet search giant has been able to enjoy a “stealth rally.”
“Given that Apple’s up more than 60 percent this year while Google’s only up about the same amount as the S&P 500, you can feel much more comfortable about owning GOOG knowing that you won’t be giving up big 2012 gains if the market turns down,” Cramer said. “It just doesn’t have much of them.”
To Cramer, there are several factors that make Google easier to buy than Apple at current levels.
“Apple’s still affiliated with a founder who is not alive," Cramer said, , referring to Apple co-founder Steve Jobs, who died in October 2011 after a long battle with a form of pancreatic cancer. "Therefore, we know at a certain point the drawing board of a founder who isn’t with us will end. Has it already? We don’t know.
(Related: Starbucks CEO Draws Comparison to Steve Jobs.)
“But Google’s different," Cramer continued. “Google is a machine — it isn’t a man — and it isn’t beholden to any one person.”
Meanwhile, Cramer noted Apple seems to only be one step ahead of rival Samsung while Google is blowing its competition away. Whether it’s Facebook, Microsoft or Yahoo, Cramer said nobody can beat Google at internet search.
Cramer had also worried that Google overpaid in its $12.5 billion acquisition of Motorola Mobility, but research from Mark Mahaney at Citigroup suggests Google got its money worth.
Finally, Cramer had long thought Apple would engage in the cloud computing and social media space. It’s failed to do so, though, while Cramer noted Google has done a terrific job at social.
So what’s the bottom line? While Cramer said he’s not backing away from Apple as an investment, he thinks Google is currently a better investment because it’s a cheaper and better stock to own overall.