Cramer: How to play this 'two-track' market

Cramer: Stop comparing this market to dotcom bust

Investors need to stop comparing the current stock market to the dotcom bubble of the early 2000s, CNBC's Jim Cramer said Thursday, despite the sky-high valuations on stocks such as Tesla Motors and Netflix that seem to suggest otherwise.

The stock market has been running on "two tracks" lately, Cramer said, invoking a theme he has touched on for several weeks. In one part of the market, headline-grabbing social media and Internet stocks have generated talk of a new tech bubble, and that diverts attention from a stock market full of staid, household names that sport reasonable valuations.

What's more, the market doesn't have nearly as many "frothy" stocks as it did in 1999, Cramer said.

"Please stop saying that's the whole market," Cramer said on "Squawk on the Street." "You are ignoring a Wells Fargo ... They don't remember what 1999 was like."

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On Wednesday, Cramer dug deeper into his "two-track" stock market thesis on "Mad Money," advising investors to take profits on runaway stocks. In the part of the market than runs on momentum, Cramer said some of the most hyped tech companies of this dotcom era—such as Facebook and Google—trade on real earnings. Others, such as Tesla and SolarCity, trade on hope. Companies such as trade on revenue growth, he said.

Valuations during the dotcom bust of the early 2000s seemed much more out of proportion than they do now, Cramer said, adding that investors then treated new tech companies as if they could become the next Amazon.

"Yes, I think some stocks are frothy," Cramer said. "I just don't see a peak here, because many stocks are not frothy. It's a two-track market. And unlike 2000, the bizarre, frothy track is much smaller than the staid reasonable track. That was not the case back then."

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As stocks rose in early trading Thursday, Cramer said he could become concerned about the market under certain circumstances, such as when traders don't act on bad news.

"That's what worries me," Cramer said. "We're not seeing that."

Disclosure: Cramer's charitable trust owns shares of Google and Facebook.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."