Mad Money

New iPhones should move the needle, says Cramer

No Huddle Offense: Turnaround ahead for Apple?
No Huddle Offense: Turnaround ahead for Apple?

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

Typically the Mad Money host doesn't expect new products to boost shares significantly. But he believes the new iPhones are exception.

"I think this case is unusual in that I do believe the needle will be moved and Apple stock will go up," predicted Cramer on Wednesday September 18th. "They are that different and that important to the company that the stock can go higher over time from them."

Driving shares higher is no easy task, especially when a company is the size of Apple. However, Cramer believes the new products could trigger a sentiment shift and improving sentiment is a powerful catalyst on Wall Street.

"The reviews were breathtaking," Cramer said. "The guy I listen to for what I want to do, David Pogue of the New York Times wrote this about them 'it's a terrific phone. The price is right.'

Apple CEO Tim Cook speaks about the new iPhone products during the announcement.
Getty Images

However, Cramer was most impressed by 5 words in Pogue's review. It will sell like hotcakes. "As far as I can tell, most of the Wall Street community is not expecting hot cakes like sales numbers," Cramer said.

To an investor – that matters. That is, sales matter. "Institutional stock holders will notice year over year sales and higher gross margins," Cramer explained.

Also, he added, sentiment is currently lackluster; earlier in the month at least 3 firms downgraded Apple. Largely, Cramer says the Street won't have high expectations. Therefore those increased sales should surprise to the upside - beating expectations.

"If you are a shareholder, as my charitable trust is, that's exactly what you want to have happen," Cramer said.

Also Cramer believes Apple has another powerful catalyst.

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In that same article, Pogue said while huge hardware innovations are behind the industry, 'software breakthroughs are only just getting underway.'

Pogue also praised the new iPhone's redesigned operating system iOS7, which he called 'more efficient to navigate.' 'Nothing on the screen is eye candy; everything is a button, so you spend less time hunting for things,' Pogue wrote.

Those kinds of software breakthroughs are somewhat unexpected and unexpected positives can also move the needle.

"So, here's my conclusion," Cramer said, "I believe these phones will boost sales. Therefore, the downgrades coupled with the positive reviews will, I believe, drive the stock higher."

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