Cramer: Facebook holds the 'holy grail' for advertisers

As Facebook opened for trading above the $38 level for the first time since its IPO, CNBC's Jim Cramer said that the fundamentals for the company are shifting, and the business has entered a "virtuous cycle" in the advertising space.

(Click here to see where Facebook shares are trading now)

As one of the largest holdings in Cramer's charitable trust, he said the investment decision was made because "they have the holy grail. No one can reach these millennials. No one can reach the right demo—so to speak—on the Web except Facebook."

Cramer praised the company's nonintrusive advertisements, mobile strategy and a "virtuous cycle" in its numbers, where firms will be motivated to choose Facebook over more traditional advertisement mediums.

(Rewind: Cramer: A 'straight shot' to $38 for Facebook)

In comparison, Google's strategy of using a programmatic advertising system is less attractive to companies looking to reach targeted demographics, Cramer said on "Squawk on the Street" Wednesday, compared with Facebook's platform. "I don't know why, right now, you would go with this programmatic advertising campaign of Google if you can do a targeted advertising campaign," he said.

Facebook "guys were always smart guys, but they had a bad IPO. Now we realize, holy cow, the firepower!" he said. "Zuckerberg has really done remarkable things here. He has been able to generate clicks on ads by the people you want."

In addition, Cramer said that from his perspective, Facebook is the place where the best and the brightest in the U.S. college system want to work, "they all want to go to Facebook."

(Related: Why the Facebook rally could end at the IPO price)

"If you are a major consumer products company, you gotta call Facebook. You must advertise worldwide," he said. "It's the Super Bowl every day, they said it on their quarter and now the dream is realized."

Despite the momentum in the stock price, the psychological level of hitting the IPO price will likely cause a temporary wave of selling. "You've gotta get some selling at $38. You just have to," Cramer said. "It is a parabolic move. I haven't seen parabolic moves like this other than on takeovers."

Disclosure: Jim Cramer's charitable trust owns shares of Facebook.

—By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul.