Netflix was the clear winner of FANG last year — Jim Cramer's acronym for Facebook, Amazon, Netflix and Google, the parent of Alphabet — up more than 100 percent in 2015. Unfortunately, that all changed in 2016, with the stock down 12 percent for the year.
"After months of underperformance, Netflix has been bouncing back over the last week, and I think it's got more room to run," the "Mad Money" host said.
Historically, Netflix tends to pull back hard after a prolonged run. It occurred twice before, in 2011 and in 2014. Wall Street soured on Netflix again this year as many investors thought the company didn't seem to care about profitability, and its earnings power seemed unclear in the near-term.
Yet, when the stock initially soared into the stratosphere last year, investors weren't worried about earnings weakness. They also didn't care that Netflix was spending large amounts of money on programming licenses and developing its own content.
"That is because the company was generating phenomenal subscriber growth, and subscribers are the key metric here," Cramer said.