Jim Cramer Calls Market Decline ‘Man-Made’ and Breaks Down 15 Stocks

6. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 174

Jim Cramer explained why his Charitable Trust had fully exited its position in Alphabet Inc. (NASDAQ:GOOGL) and categorized the stock in the bottom tier of the Magnificent 7. He cited concerns about generative AI threatening Google’s core search business and broader macro risks tied to advertising. He said the following:

“The bottom tier of the Magnificent 7 names start with Alphabet stock that we just sold out of entirely for our charitable trust.  My main concern, I think generative AI may pose an existential threat to their core search business. I think many younger people are bypassing Google entirely and going straight to ChatGPT. Google Search is a $200 billion a year business! Plus, if the tariffs cause a recession, this is another advertising-based business that will get crushed. I think it’s more vulnerable than Meta.

Now there are still plenty of reasons to like Alphabet. Youtube’s arguably the most important force in media at this point. The Google Cloud Platform is a top three or four offering in the cloud space and still growing nicely. Best of all, Alphabet now trades at just 16 times this year’s earnings. That’s a big discount to historical valuation. I just think it’s too risky.”

Jim Cramer said something similar about Alphabet Inc. (NASDAQ:GOOGL) on April 1^st, after a caller asked him why he doesn’t consider the company a buy anymore:

“I’ve left Google now. I didn’t leave it at the right price, I know that, but I left it because I don’t use Google other than for like the most simple historical [queries], because there’s other ones. I won’t go to Grok to find whether Hoover was president; I still use google for that. I just find myself using so many other things that I know I can’t be alone, and that’s what I worry about. I know YouTube’s doing well, though.”