Having faith in the stocks of companies with strong leadership is critical to successful investing, CNBC's Jim Cramer said on Wednesday.
But in some cases, investors give companies too much credit. For Cramer, the most glaring example was Amazon, a company the "Mad Money" host refers to as the "Death Star" for its seemingly unfaltering ability to crush any rival in its path.
For example, in 2016, a Jefferies report warned that Amazon could go after auto parts retailers like AutoZone and Advance Auto Parts. Shares of those companies plummeted as a result, spending much of 2017 in decline.
"Well, guess what? The big calamity? It never materialized," Cramer said. "We overestimated the prowess of Amazon in the auto parts space and we underestimated the power of AutoZone."
Until recently, shares of CVS exhibited a similar pattern. As the drugstore operator prepared to merge with Aetna, investors worried that Amazon's moves in the pharmaceutical and health care spaces would encroach on the deal's potential.
But after CVS' better-than-expected second-quarter earnings report, "I think we've given Amazon too much credit and CVS too little," Cramer said. "As powerful as the Death Star may be, it can't wipe out a whole industry overnight."
For more on why investors should have faith in particular companies including Disney, click here.