CNBC’s Jim Cramer called the market “wacko” Monday because investors wouldn’t normally benefit by chasing soaring stocks that are trading at off-the-chart multiples to sales, such as Zoom and Snowflake.
Cramer said Zoom Video Communications, which is trading at about 50 times sales, and cloud company Snowflake, trading at about 100 times sales, are now worth owning. He advised people to buy and invest in stocks on the assumption that the coronavirus pandemic is not going away anytime soon.
Cramer contrasted Zoom’s video conferencing business to the rough ride in the oil industry, since people aren’t driving as much.
“Zoom is doing triple what it was doing like three months ago. And I know it’s 50 times sales. But at the same time, I want growth not from cutting and hopefully having more oil per rig. But I want growth that is pure and dominate,” he said.
Cramer pointed to Monday’s comments from Dr. Scott Gottlieb who said the “hardest part” of the coronavirus outbreak in the U.S. is probably still ahead. “There’s really no backstop here,” said the former FDA chief, because treatments and a possible Covid-19 vaccine won’t be available for a while.
In a commentary during his morning appearance on Squawk on the Street,” Cramer said: “Do I really want to be in a world where I think Covid is going to end and we’re going to start driving like mad and oil is going to go up? I’m not buying it. I’m not buying that better-than-ever world.”
With infection surges in the U.S. and Europe, the number of confirmed coronavirus cases around the world topped 40 million on Monday, according to data from Johns Hopkins University.
When adjusting for population, Europe reported new daily cases of 187 infections per million people, based on a seven-day average, compared with the United States’ number of 162 per million.
Across the nation, coronavirus cases grew by 5% or more in 38 states, as of Friday, according to a CNBC analysis of data compiled by Johns Hopkins that uses a weekly average to smooth out the reporting. The nation is averaging roughly 55,000 new cases every day, a more than 16% increase compared with a week ago.