Jim Cramer is skeptical of Google parent’s march toward $1 trillion

Alphabet is close to joining one of the most elusive clubs on Wall Street, but CNBC’s Jim Cramer said Monday that he is skeptical of the progress.

Shares in Alphabet, the tech giant that owns Google, rose almost $10 to an all-time closing high of $1,440.03, pulling within 1% of reaching $1 trillion of market capitalization.

“Now, I don’t like this move. It’s based on nothing fundamental, just the momentum that we see in so many tech names,” the “Mad Money” host said.

Alphabet was worth about $992.7 billion as of Monday’s close, a couple of slots away from being the most valuable company on Wall Street.

Alphabet stock climbed more than 28% in 2019, shy of the 35% gain that the Nasdaq Composite it trades on made in the year. The stock has had just two down days thus far in 2020 and has advanced a total of 7.64% since the start of the year, which beats the tech-heavy Nasdaq’s nearly 3.4% gain.

Three other tech behemoths have crossed the $1 trillion mark, including Microsoft, Apple and Amazon, though the latter now holds a market cap of $937.7 billion. Apple captures nearly $1.4 trillion of market value, while Microsoft holds $1.2 trillion, according to FactSet.

Facebook, the runner-up to all of the aforementioned companies, is worth almost $633 billion. No other company is valued above $500 billion by the market.

While these companies all hold high valuations of varying levels, they all share a common denominator in Cramer’s eyes: the fundamentals. Cramer worries they’ll have a tough time justifying their recent gains when they report quarterly performances in coming weeks.

He fears their stocks could recede if they do not report substantially higher-than-expected numbers.

“We’re witnessing the same thing in the two other stocks in the trillion-dollar club, and that’s Microsoft and Apple, which means their stocks may not be able to withstand any earnings results short of a super beat, not just ‘better than expected’ by a couple of pennies. I don’t know if that’s even possible,” Cramer said. “Hey, by the way, Facebook’s in the same boat.”

Disclosure: Cramer’s charitable trust owns shares of Alphabet, Facebook, Microsoft and Amazon.