Titanic tech stocks Intel and Microsoft are two of the strongest, cheapest stocks on the market and they still have plenty of momentum on their side, "Mad Money" host Jim Cramer said Wednesday.
Now that we're back in bull market mode, Cramer said, Wednesday's pullback could be the perfect time to snag high-quality stocks. Technical indicators certainly suggest that both Intel and Microsoft could soon surge to dot-com era highs.
While Intel struggled to breach $30 a share for more than a decade, some technicians think the next stopping point could be $35. And despite the $34 ceiling keeping Microsoft's growth at bay, some think the price cloud soar to $47 in the not-too-distant future. In short, we could be looking at a 25 percent gain in Intel and a 50 percent gain in Microsoft.
"Those are some pretty spectacular moves," Cramer said. "Especially when you consider that both of these are relatively low-risk old line tech companies with cheap valuations and decent dividends."
Both stocks are huge value plays, selling for approximately 10 times earnings with growth rates of 10 to 11 percent. They also pay bountiful dividends — Microsoft yields 2.5 percent, while Intel offers up an even juicier 3 percent yield.
"These companies have matured, but they refuse to be relegated to the dust-bin of history," the "Mad Money" host said.
In fact, they're all about the future now. While Intel's old-school PC segment took a blow after last year's flooding in Thailand, Cramer said it looks like this business has bottomed. "Intel is still the largest, most dominant chipmaker company on earth."
Plus, he said, the firm has done well in fast-growing emerging markets, where the rising middle classes are demanding more and more high-end computers powered by Intel's processors. The company is also covering areas that are more in synch with the big tech trends of the era, now that it's finally tapping into the mobile market by launching chips for smartphones and tablets. And, of course, investors are anxiously awaiting the launch of Microsoft's Windows 8 later this fall.
Cramer also said he thinks investors can buy the stock into any weakness ahead of first-quarter earnings.
But if he had to choose between the two tech giants, Cramer would put his money into Microsoft, since the introduction of Windows 8 could give the stock some fuel. He said it also profits from its popular XBOX gaming system and boasts "just about the best balance sheet in America, save Apple.”
Those interested in buying Microsoft should wait for the stock to pull back to the $29 to $30 range, though, he said.
Shares of Intel traded down 18 cents to $27.93 at the close, while Microsoft ended the day at $31.21 per share.
When this story was published, Cramer's charitable trust owned Apple.
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