Jim Cramer looks at how 2 of our high-flying tech stocks crushed Wall Street naysayers

CNBC

3 days ago

The bears got it wrong on both Meta Platforms and CrowdStrike . Needham walked back a prior call on Meta — upgrading the Club stock to a hold from a sell equivalent rating, which had stood since July 2022. No price target was given. The lead analyst on Thursday's note, Laura Martin, said her prior rating and thesis were "based on rapidly rising Reality Labs losses and cost increases from more GenAI FTEs (full-time employees) and higher [capital expenditure] spending." While both "negatives came true," Martin added, they were "more than offset by META's strong rev growth and the fact that META fired (and then replaced) about 25% of its total FTEs between Nov 2022 and 2025, which aided its labor productivity metrics." META YTD mountain Meta Platforms YTD Jim Cramer on Thursday attributed Meta's success to a "great model," which he has touted for years. First of all, the Facebook, Instagram, and WhatsApp parent company does not pay for content. "I'll go one step further," Jim added. "They have used AI in a way that is so fabulous that really no one's ever experienced" in advertising. Meta, which has been on a massive artificial intelligence worker hiring spree , has capitalized on AI to allow companies to create their own ads and hyper-target their messages to audiences on some of the biggest social media platforms in the world. AI at Meta is also used to serve those audiences with content relevant to their interests. While Jim respects Martin, who is also well-regarded on the Street, he said her Meta call was "really bad," with Meta shares soaring more than 340% since the July 11, 2022, sell call at around the $160s. For the rest of 2022, however, it had looked like a great call as Meta and other tech stocks and the entire market, for that matter, were crushed that year. But 2023 and 2024 were banner years for stocks — and so far this year, Meta shares surged nearly 23%. From its 2025 closing low of $484 on April 21, the stock has surged more than 50%, and it logged a record-high close of $738 on Monday. Last week, we raised our Club price target on Meta to $800 from $700. Jim also included Meta as one of the "Ms" in his newest acronym , "MNM." Club names Nvidia and Microsoft represent the others. Meta has been part of Jim's Charitable Trust, the portfolio used by the CNBC Investing Club, since May 2014. It's currently the third-biggest stock by weighting in the Trust. Despite what they describe as "channel checks driving upside to our estimates," Martin and her team are still cautious, saying they are only going to a hold rating, not a buy, due to various factors, including growth in capex and costs, as well as valuation. They did say, "We would likely get more positive about META just above $600," which implies more than 11.5% downside from Thursday close. CRWD YTD mountain CrowdStrike YTD Some investors thought CrowdStrike shares would be in for a difficult stretch after the cybersecurity company's botched software update on July 19, 2024, which caused a global information technology outage and crushed the stock. "There were a lot of people who felt this company was finished," Jim said Thursday. "I salute George [Kurtz]," Jim added, crediting the CEO for his tireless efforts to reassure clients after the outage, which resulted in a minimal loss of customers. The Club watched as CrowdStrike stock recovered, and we initiated a position at around $300 per share back in October . Most recently, the Club booked some profits in CrowdStrike on June 24 out of respect for its huge move higher, but our belief in the company for the long haul has not wavered. In fact, three days after that trim, we increased our price target on the stock to $520 from $500. Nearly one year since the IT outage, there are many more believers in CrowdStrike. However, the average analyst price target was still nearly 9% current levels, according to CNBC Pro data. Like Jim, Wedbush has been a long-time bull — and on Thursday, raised its CrowdStrike target price to $575 from $525 — a 12% premium to Thursday's record-high close of $514. The analysts team, led by Dan Ives, said CrowdStrike remains one of its favorite tech names. Wedbush maintained its outperform buy rating. "We believe increased market and mind share is happening for CrowdStrike among new and existing customers as the company's product suite continues to expand across the enterprise landscape over the next 12 to 18 months," the analysts wrote. They also praised CrowdStrike's AI integration across its portfolio to capitalize on demand for more sophisticated cyber solutions to protect against malware attacks. (Jim Cramer's Charitable Trust is long CRWD, META, MSFT, NVDA. See here for a full list of the stocks.) 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