Mad Money

Big Tech stocks are buys on any negative antitrust news, Jim Cramer says

Key Points
  • Big Tech stocks barely flinched one day after members of Congress recommended parts of their underlying companies be broken up.
  • "The time these Big Tech stocks get hit by some bad headlines from the House Judiciary Committee is the time you have to buy them," CNBC's Jim Cramer said while giving his take on monopolistic concerns about U.S. tech giants.
  • "While they've crushed some competitors, they've also created entire industries that are filled with small businesses," he said.
VIDEO4:0104:01
Jim Cramer: Amazon, Apple, Google and Facebook should not be broken up

Big Tech stocks barely flinched one day after members of Congress recommended parts of their underlying companies be broken up, but investors should be ready to buy if the stocks dip in the future, CNBC's Jim Cramer said Wednesday.

"The time these Big Tech stocks get hit by some bad headlines from the House Judiciary Committee is the time you have to buy them," the "Mad Money" host said. "Regardless of who wins the White House next month, they're not gonna roll back 40 years of antitrust."

The comments come on the heels of a Democratic congressional staff report out Tuesday that called for updates to the nation's antitrust laws and to shake up operations of the largest U.S. technology corporations. The report charges Apple, Amazon, Facebook and Alphabet subsidiary Google with having monopoly power.

Facebook was the only one of the three stocks to fall in Wednesday's session, slipping 0.2% to a $258.12 close. Amazon rallied 3% to $3,195.69, outgaining the almost 2% gains that the major averages put up.

The findings come out of a 16-month investigation, led by the House Judiciary subcommittee on antitrust, into the companies' competitive practices. Its authors call for imposing structural separations and preventing the firms from giving preferential treatment on their platforms to their own services.

While the members of the bipartisan panel concluded that the tech giants, which command more than $5 trillion in total market cap, have monopolistic exploits in their business models, congressional Republicans and Democrats are at odds over how to address their concerns.

Cramer came down against the lawmakers and on the side of the companies, highlighting their relationships to the entrepreneurial community.

"Apple, Amazon, Alphabet and Facebook can credibly argue that they're our national champions that help small businesses thrive," said Cramer, who said he is in favor of giving favorable treatment to the companies to give the U.S. a competitive edge over other nations. "That's a compelling argument."

"These companies have created riches beyond belief, both for themselves and their shareholders. I think we should let them keep doing that."

Alphabet, Amazon, Apple and Facebook are the epitome of America's might in the internet, e-commerce, telecommunications and social media fields.

While acknowledging that monopolies are bad for competition and entrepreneurship, Cramer praised the firms for their role in helping small businesses reach consumers.

Former Microsoft CEO Steve Ballmer, who led the software giant through its own chapter of a congressional antitrust probe, earlier Wednesday on CNBC gave his take on the whole ordeal. The Los Angeles Clippers owner doubts that the companies will ultimately be forced to break up, though he did advise that management "engage [regulators] on the issues now." Microsoft settled with the Department of Justice in 2001 to prevent the company from being forced to split its Internet Explorer browser from Windows.

Cramer, however, said he isn't fully convinced that Alphabet, Amazon, Apple or Facebook are monopolies, though the accusations are more compelling for some over others.

"There's no doubt that these companies have gotten a lot more powerful, but that's because they're creating incredible things. We can't live without them," Cramer said. "While they've crushed some competitors, they've also created entire industries that are filled with small businesses."

VIDEO10:0810:08
Jim Cramer isn't buying the House antitrust findings on Big Tech

Disclosure: Cramer's charitable trust owns shares of Amazon, Alphabet, Apple, Facebook and Microsoft.

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