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Cramer's take on Wall Street's top 15 'anointed' stocks for 2017

  • "Mad Money" host Jim Cramer shared his thoughts on the top 15 stocks big investors are buying into year-end, including Alibaba, Apple and Amazon.
  • Cramer said major players on Wall Street "anoint" these stocks for three distinct reasons.
  • The point of Cramer's exercise is to recognize that most of the "anointed" names are expensive and will keep running higher.

CNBC's Jim Cramer always pays attention to this week, the week where major Wall Street investors "anoint" and buy the stock market's best performers going into the end of the year.

"So how does a stock qualify to become anointed? Well, first, they need to be having a great year," the "Mad Money" host said. "Second, there has to be a long-term thesis to justify what would otherwise look like nosebleed valuations. Third, you need a belief that nothing can go wrong for the company between now and year-end."

Portfolio managers "anoint" stocks because they want to show their clients they invested in the year's winning names, Cramer said.

So Cramer went through the top 15 stocks he thinks will become "anointed" this year, in alphabetical order, to give homegamers a better picture of Wall Street's most wanted.

1. Alibaba

First on the list was Chinese e-commerce colossus Alibaba, the world's largest retailer.

"It's growing like crazy, and it just had a terrific Singles Day," Cramer said. "Alibaba's stock may be up 114 percent for the year, ... but I think portfolio managers would be happy to pay even more for the top Chinese stock in a year where China again became investable."

2. Adobe

With strong sales numbers and new, artificial-intelligence-based products, Adobe has completed its transition into being a pure cloud stock, Cramer said.

"While the stock's already up 76 percent for 2017, every time it comes in, buyers clamor for more," the "Mad Money" host said.

3. Align Technology

Cramer has always found Align Technology, the maker of Invisalign, to be a shoe-in for investing around the selfie generation.

"There's a ready sales force for Invisalign, and that's the hundreds of thousands of dentists who want to sell new product now that cavities are in decline — at least secular decline — thanks to improved hygiene," he said. "No wonder Align's stock is up 165 percent. Even up here, it remains cheap for the momentum chasers."

4. Amazon

Valuation means little to begin with when it comes to analyzing Amazon, but Cramer said the online giant is valued more on the sum of its parts.

"The thesis? Amazon's really two companies: a retailer and a web service provider. If you broke them up, the sum of the parts could be worth $1 trillion," he said. "Given that Amazon currently has a market cap of $541 billion, that gives portfolio managers plenty of leeway to buy more."

5. Apple

After Apple's double release of the iPhones 8 and X, Cramer doesn't see why its stock couldn't run more than the 46 percent gain it has seen so far in 2017.

"When the world's largest company has a stock that sells at merely 14 times earnings, 14 times, then you keep buying it on the way up and it won't stop being dirt cheap until it trades" at 18 or 19 times earnings, he said.

6. Arista Networks

Cramer admitted that he didn't know much about Arista Networks, a cloud networking company that connects businesses to data centers. But with a 149 percent gain for the year, he said the Cisco rival seemed "unstoppable."

7. Boeing

The demand for aircraft is off the charts, so leading aircraft manufacturer Boeing is a benefactor of the surging secular growth.

"These are halcyon times for the aircraft makers," Cramer said. "Boeing's run up 70 percent for the year — this is a big-cap stock — yet it is easy to justify buying it much higher."

8. Home Depot

Even though Home Depot shares have only run up 27 percent for 2017, Cramer said the home improvement retailer's stock could still run higher having gone above its old all-time high.

9. Lam Research

Cramer attributed the relative cheapness of Lam Research's stock to people still seeing the semiconductor industry as purely cyclical rather than secular.

"This semiconductor equipment maker just keeps putting up fabulous numbers, yet it hasn't been rewarded nearly as much as it deserves given that it sells for just 14 times earnings. That's nuts, people," he said. "Lam is up 103 percent. It can go much more."

10. 3M

Up almost 30 percent for the year, portfolio managers might be embarrassed not owning the stock of 3M after its seriously strong earnings results in the latest quarter, Cramer said.

"This stock may be the ultimate blue chip for 2017," the "Mad Money" host said.

11. Nvidia

Investors can't ignore Nvidia's three-pronged approach to satisfying the need for high-quality semiconductor chips in the worlds of gaming, data centers and autonomous driving.

"Given that many of the institutions buying the stock simply aren't sensitive to near-term valuations, any price can be paid," Cramer said. "Sky's the limit. Where this one stops, nobody knows."

12. PayPal

Currently trading at $76 a share and up 92 percent for 2017, Cramer wouldn't be surprised if payment processor PayPal surpassed $100 in the near term.

13. Square

Having run 232 percent year-to-date, Cramer thought payment technology play Square had run out of steam.

"Now I'm thinking it might have more room to run thanks to the bitcoin initiative. People are desperate to find a bitcoin play," Cramer said. "Square, by default, is now that play."

14. VMware

Riding the same cloud adoption theme as Adobe, VMware, with shares up 57 percent for the year, has its hands in one of the hottest areas of the technology market, Cramer said.

15. Wal-Mart

Even after Goldman Sachs downgraded the big-box retailer's stock, Cramer maintained that Wal-Mart is the only company that will be able to challenge Amazon in the long term.

"That means it's going to be a must-own, which isn't bad for a stock that's up 41 percent but still trades at just 22 times earnings," Cramer said. "Goldman says the stock's gotten ahead of itself. Oh, perfect. All of these stocks are technically ahead of themselves, but that's precisely what gets them anointed."

Final Thoughts

"In a perfect world, I'd like to wait for a pullback ... to tell you to buy any one of these red-hot names," the "Mad Money" host said. "But at this time of year, it's very unlikely you'll get a pullback in the anointed winners, as hedge fund buyers can't get enough of them. But if by some fluke, by some chance, any of these names dips, well, you should jump all over them."

WATCH: Cramer guesses Wall Street's 2017 favorites

Disclosure: Cramer's charitable trust owns shares of Apple.

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