Cramer on Wednesday raised his price target on Apple from $400 to $500 a share. Yet at the $500 level, the technology stock will be selling at just 11.5 times his estimates for next fiscal year's earnings, only three quarters of what the average company in the S&P 500 index sells for.
Apple's stock rallied 10 points on Wednesday while the overall market did nothing, yet Cramer said stocks are still the best asset class to own. To make his case, he compared the United States versus the "United States of Apple or more appropriately, iUSA." This comparison shows why stocks should be owned, he said, especially as companies are doing everything right while the country's leaders are doing so many things wrong.
For starters, Cramer noted the U.S. is deeply in debt. If the U.S. wasn't such a large part of the world economy with a currency that has a legacy of being worth something, he thinks the International Monetary Fund would be knocking on the U.S.'s door at this rate of spending.
Apple, on the other hand, has $76 billion in cash and no debt to speak of, Cramer said. Some critics have actually complained that Apple should be putting its cash to work. Cramer thinks it made the right decision to keep its cash, though. After all, he doesn't think there have been any companies worth acquiring. He would, however, like to see Apple pay a dividend. Being as there are only 30 companies in the U.S. with a market capitalization larger than the cash position of Apple, some may argue it already has more than enough money saved for a rainy day, he argued.
So when it comes down to it, would you rather invest in a country that is deep in debt or a company that's prudent enough to say it will sit on its money until it finds a company worth buying? Cramer is going with the latter.