Cramer reveals his favorite big-cap stock to own now, sees 20% upside

varam1 month ago02 mins mins

CNBC’s Jim Cramer is doubling down on Alphabet , arguing the stock can build on its strong 2025 rally with another 20% jump. “I don’t think Google stops here,” Cramer said Tuesday on “Squawk on the Street.” “I think Alphabet goes straight shot to $400.” Shares of the Google parent Alphabet hit another all-time Tuesday, rising 2% to $338 per share. The previous record was Monday’s close of $334. The stock posted a 65% gain in 2025. Despite that recent run, Alphabet continues to attract investors, even as the broader Magnificent 7 cools off. Investors have been rotating out of high-valuation tech names and into more defensive sectors like industrials, energy, financials, and health care. “The market has really soured on these big-cap names,” Cramer said. “The one to own is Alphabet — it goes much higher,” he added. Indeed, Alphabet is up nearly 5% to start 2025, while Meta has fallen 4.7% year-to-date, Nvidia is down 1.7%, and Tesla has slipped 0.6%. GOOGL 1Y mountain GOOGL stock 1-year performance. Sentiment toward Alphabet has strengthened as it’s increasingly seen as a leader in generative AI. The company has landed a series of significant wins, most notably its multi-year partnership with Apple to bring Google’s Gemini AI models to Apple products. That integration is expected to meaningfully increase Gemini’s usage and solidify its position as the leading large language model versus rival ChatGPT. That helped push the company into the $4 trillion market-cap club alongside Nvidia, Microsoft , and Apple. But for Alphabet shares to continue advancing, Bank of America noted that the company needs to hit on several cylinders, including Gemini continuing to demonstrate its technological leadership, cost advantages from its custom tensor-processing units (TPUs), and increased search monetization. The positive narrative on the stock suggests the “AI cycle is moving in the right direction for Alphabet,” Bank of America wrote in a note to investors Tuesday. Regarding the Investing Club’s portfolio, we want to add to our Alphabet position, which was initiated in late December. Since the stock is trading above our cost basis, we would wait for a pullback before buying more. We maintain our $350 price target on Alphabet and a 1 rating on the stock.