As stock valuations rise each day, Jim Cramer says investors need to figure out what they can handle in the market. He compared Amazon,Facebook and Microsoft to explain the concept of risk and reward amid elevated prices.

"As we go higher and higher, the risks grow and you need to know not just the rewards but what can go wrong after this historic run," the "Mad Money" host said.

Cramer chose these three stocks because they are well-known, and provide insight on the different ways that stocks can be valued in an overheated market.

Facebook hit an all-time high on Wednesday when it confirmed that its messenger service now has 1 billion users, with 200 million new users since the beginning of the year.

"That's a pretty monumental refutation to those who believe the world's abandoning Facebook in favor of competitor Snapchat," Cramer said.

The stock seemed expensive to Cramer at 31 times earnings, but he thinks the growth rate is actually accelerating, even with a 31 percent monster growth rate. That actually makes it cheap in Cramer's perspective, because growth stocks tend to trade between one or two times their growth rates and Facebook is at the bottom of the range.

"I pronounce Facebook as being relatively inexpensive versus a ton of other growth stocks in this market, suitable for those individuals willing to take on some risk in order to get a lot more reward than stock like Microsoft can offer," Cramer said.

After the monster run that the stock market has had recently, Cramer estimates that the average stock in the now sells at an expensive 20 times earnings. However, he is still seeing signals that there is no major correction in sight.

There are only two ways to get out of the overheated position the market is in right now, Cramer said. First, the market comes down to make it cheaper. Or, companies in the S&P start earning more than Wall Street expects because things are actually getting better than they expect.

"I believe the latter is happening, that the S&P will turn out to be cheaper than we thought and thus valuations will turn out to be less expensive, allowing us to get out of this period without a major correction to lower levels," Cramer said.

Microsoft, Illinois Tool Works and Cintas all skyrocketed higher on Wednesday after reporting better-than-expected numbers. Those numbers signaled more robust growth than anticipated.

Regardless if the market heads higher or lower, Cramer has noticed a red-hot group that consistently has money pouring into it—pets.

Between 2001 and 2015, Cramer noted that the amount of money spent taking care of animals has more than doubled, rising to $60.3 billion a year.

"This theme is here to stay, a fabulous place to invest on any scare, whether it be from the Fed or overseas or certainly from the madness of the upcoming presidential election," Cramer said.

On Tuesday, Cramer identified his top pet care plays as VCA or IDEXX Laboratories on the next big pullback. He continued that analysis on Wednesday by comparing Blue Buffalo Pet Products, Freshpet, J.M. Smucker, Henry Schein and Central Garden and Pet.

Ultimately Cramer advised that for investors who want to invest in the animal group, to either go with IDEXX and VCA that he previously recommended, or invest in Blue Buffalo for pet food. He also recommended J.M. Smucker and Henry Schein on a pullback for non-pure plays that still have strong animal exposure.

XPO Logistics is the fast-growing provider of transportation and logistics services. The company recently made an acquisition of Con-way, which put pressure on the stock price initially.

However, what concerned Cramer was that the company borrowed a lot of money to do a series of big acquisitions in the past 18 months. Before its $3 billion Con-Way purchase, it bought Norbert Dentressangle, the European shipping company.

"I think this company has its pulse on global commerce and if it can do well, then the whole stock market could continue to levitate," Cramer said.

Cramer spoke with XPO's chairman and CEO Brad Jacobs, who outlined the benefits to the multiple acquisitions made.

"We are at an inflection point in the growth of the company. So, for the last five years we have purchased 17 fantastic companies. We built the company like a tank, put the whole infrastructure in place, the technology and now we are reaping the benefits of that," Jacobs said.

The price of oil also seems to have found some stability in the mid-$40s, leaving Cramer to question what to make of the state of the oil patch.

Core Laboratories is the oil service play that utilizes technology to analyze rock and fluids in oil reservoirs to help clients make drilling more efficient and increase production.

The stock was hit hard with the fall of the price of crude, and Core Labs is down 40 percent from its all-time highs just over two years ago. But with the oil market bouncing back and Core Labs reporting a solid quarter on Wednesday, Cramer spoke with its chairman and CEO David Demshur, who said he believes there is a V-shaped recovery for oil.

"One of the things that happens at $50, is we do have a lot of small, independent producers around the U.S. that are going to hedge future production. So, at $50 that is a good target to get through. Once we get through there we are probably heading up to the $60 range," Demshur said.

In the Lightning Round, Cramer gave his take on a few caller favorite stocks:

Synergy Pharmaceuticals: "I too am frustrated with the situation. I do not think that Brent Saunders [CEO of Allergan] is going to bite on that. I do believe that the Allergan money [from Teva] is going to come in within the next couple of weeks. Remember, they thought it would come in by July and July is almost over."

Communications Sales & Leasing: "We like digital realty in that space. This is a red-hot stock, absolutely, and I think it's a good one. But the one that we emphasized was, we did CoreSite and we did Digital Realty. They are all trading at their highs, but I like yours. It has a good yield, but I like Digital Realty more."