Jim Cramer told investors Thursday he’s keeping his faith in the Magnificent Seven tech stocks. The “Mad Money” host made his case even as most of these companies struggle in early 2026.
The Mag 7 group includes Amazon, Alphabet, Apple, Microsoft, Meta Platforms, Nvidia, and Tesla. Broadcom sometimes gets added to this list too. Right now, only Amazon and Alphabet show positive returns for the year.
Cramer pointed to a specific reason for the tech giants’ recent weakness. Storage and semiconductor equipment stocks have seen massive rallies. This surge is pulling investor money away from the Mag 7 companies.
“These stocks have become share donors to the market capitalization of these storage companies,” Cramer explained. The shift represents a clear rotation in market focus.
The storage sector boom stems from a shortage of memory chips needed for AI computing. Micron leads this rally with a 39% gain year to date. The company’s stock has doubled in just three months.
Seagate, Sandisk, and Western Digital also posted strong gains. These companies now have significant pricing power over their customers. The shortage means buyers have few alternatives.
Cramer compared the situation to expensive gasoline. “If oil were scarce and gas prices were high, you wouldn’t say, I am not going to use it,” he said. Companies must pay whatever price storage makers demand.
The CNBC host believes the storage rally won’t last forever. High prices eventually create their own problems. When storage stocks peak, money should flow back to tech giants.
“I think that the money will ultimately flow back to most of the Mag 7,” Cramer said. He cited their financial resources and strong management teams. These companies have multiple ways to generate revenue and growth.
Cramer sees the current moment as temporary. The Mag 7 stocks built their positions as leaders during the AI-fueled bull market. That fundamental strength hasn’t changed.
The host advises investors to hold their positions in these tech giants. Selling now could mean missing the next rally. “When they finally peak, you will be handsomely rewarded if you stay with the Mag 7,” he said.
Market rotation between sectors happens regularly in bull markets. Storage stocks attract attention now because of supply constraints. The Mag 7 companies remain well-positioned for long-term growth despite near-term pressure from sector rotation.
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