Cramer looks at why enterprise and data tech companies are winning: ‘Follow the money’

CNBC’s Jim Cramer on Tuesday analyzed the current market action, pointing out the way consumer-focused companies are suffering while outfits that deal with data and have enterprise customers triumph.

“Right now, you have to follow the money, and it’s currently flowing to businesses that cater to other businesses and the ones that need to interrogate the data,” he said. “The rest? Not much there.”

Cramer said he has “long championed this market” and has recommended stocks in many sectors, but said he is currently not getting behind most companies that rely on consumer spending on hard goods. He pointed to recent reports from home improvement retailers Lowe’s and Home Depot, both of which suggested that customers are feeling the burden of high interest rates and continued inflation.

According to Cramer, Wall Street is fixated on one prevailing theme: data. Companies will spend handsomely to improve computing power, much of which goes to data centers, he said. Cramer asserted that “the spigot from the tech titans to everything else” is endless and unavoidable, calling out the biggest names that have and interrogate data, including Amazon, Alphabet, Microsoft, Meta and Apple.

But Cramer said this consumer weakness will not last forever and the money flow may shift once rates come down.

“The good news about the limited consumer spending is that we don’t have to declare it static,” he said.

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