Tech

Just because Twitter's everywhere, doesn’t mean it's a buy, Cramer says

Twitter's a 'buzz kill': Cramer
VIDEO2:1002:10
Twitter's a 'buzz kill': Cramer

Twitter seems to be everywhere. But despite its ubiquity, the platform hasn't been able to overcome growth and money-making obstacles. SunTrust downgraded the stock Monday, adding to the "buzz kill," Jim Cramer said.

"All of these things are being done on Twitter," Cramer said on "Squawk on the Street" Monday. "But it's kind of like oxygen, just because you breath it doesn't mean it's a good stock."

Shares of Twitter fell 2 percent Monday following the downgrade. SunTrust kept its $18 dollar price target but cited trouble with monetization and unlikely near-term M&A as reasons to shift the rating to "neutral" from "buy."

"User growth and engagement for Twitter continue to be challenged," the SunTrust note said. "We believe that increasing monetization can only go so far."

Cramer mentioned key news breaking on Twitter lately, and the possibility of Republican presidential candidate Donald Trump announcing a running mate from his "Real Donald Trump" account. But from a markets perspective, Cramer recommended "sticking a fork" in the stock.

"How can that thing not be worth more?" Cramer said, adding that he's slightly more optimistic than the SunTrust analysts.

Shares of Twitter closed at $17.71, down more than 30 percent since the company went public in November of 2013. Shares have lost nearly half their value year-over-year.

"They haven't delivered," he said, adding that he's slightly more optimistic than the SunTrust analysts. "The catalysts haven't materialized, this rally's based on LinkedIn and thinking that the last property out there is Twitter."

Twitter will eventually be an acquisition candidate, but it's not likely in 2016, said Robert Peck, the SunTrust internet equity analyst who co-wrote the note.

"If there is M&A it's going to be after this year," Peck told CNBC's "Squawk Alley" Monday. "It's still an intriguing asset. It is your real-time news source so it's a great place to go."

Peck said Twitter CEO Jack Dorsey's relatively new tenure and the changing board are key reasons to postpone a deal.

Eventually, he said, logical acquirers include large media or data companies like Google, Facebook or Apple. With intensifying competition, the SunTrust note said the company could feel compelled to use its $2 billion in net cash to accelerate innovation.

Peck and his team are looking towards the second half of this year for an uptick in users or engagement. Twitter has upcoming deals with the NFL and Olympics which Peck said are baked into the stock price.

"We think the Street has it right," Peck said. Still, he and his team wrote that they need to see more evidence to get "constructive at these levels."

Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through the year 2032.