CNBC's Jim Cramer on Wednesday urged investors in high-flying electric vehicle stocks to remain disciplined, leaning on the history of the dot-com bubble to inform his latest market advice.
"I can't blame anyone who wants to find the next Tesla ... but I need you to remember the lessons of 1999," the "Mad Money" host said. "There were many stocks that made you money back then, but with the exception of Amazon, you got killed if you didn't quickly ring the register."
Cramer's comments are particularly focused on two electric vehicle start-ups — Rivian Automotive and Lucid Group — that have soared in recent days before both declining Wednesday.
Rivian, which debuted on the Nasdaq a week ago, tumbled 15% Wednesday but remains up 45% over the past five sessions. Although it currently has next to no revenue, Rivian's market capitalization of $124.6 billion is larger than those of General Motors and Ford.
Lucid, which late last month delivered its first vehicles to customers, is up 29% over the past five trading days, even after sinking 5.3% Wednesday. The luxury EV maker, which recorded less than $1 million in revenue over the first nine months of 2021, has a market cap of $85 billion.
Cramer said he fully recognizes investors want "to get in on the ground floor of the next Tesla," a pioneer in the electric vehicle industry that now is worth more than $1 trillion. "It absolutely is worth hunting for the next big winner here, but only if you recognize that it might not happen," Cramer said.
It's very possible that multiple EV companies will succeed down the road, Cramer said, but that doesn't mean their stocks are on a one-way ride higher. For example, he said that even though Qualcomm and Cisco survived the dot-com bubble and later thrived, investors ended up feeling pain.
"It took decades to be fulfilled and the momentum traders who crowded into their stocks during the dot-com era ... got eviscerated," Cramer said. "The dot-com bulls were right about what the future would look like, but they were way too optimistic about the timing."
He said that's why he's urging electric vehicle investors to be practical.
"If you own Lucid or Rivian and you've made a ton of money, you have my blessing — right here, right now, tomorrow morning — to literally take half off the table ... and you can let the rest ride," Cramer advised. "Remember, you're playing momentum, not car companies and not technology, and in that case it's better to ring the register early and often."
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