Renowned investor Jim Cramer advised against purchasing equities near their recent peaks, highlighting the risks of momentum-driven entries as the market approaches a volatile earnings season. He pointed to SPY, QQQ, AAPL, MSFT, and NVDA as examples of assets at elevated levels.
- SPY and QQQ reached new highs in early January 2026, with QQQ up 12% since December
- NVIDIA (NVDA) surged 15% over the past month, signaling overbought conditions
- Cramer warned against buying at peaks, citing upcoming earnings season volatility
- Apple (AAPL), Microsoft (MSFT), and NVDA identified as high-risk entry points
- Recommended strategy: Wait for 5%–10% pullbacks to enter positions
- Tech-heavy sectors face potential rotation as sentiment shifts
Jim Cramer issued a stark warning to investors on the heels of a broad market rally, urging caution against buying stocks at or near their recent highs. With major indices like the S&P 500 ETF (SPY) and the Nasdaq-100 ETF (QQQ) reaching new highs, Cramer emphasized that such momentum often leads to painful corrections. He specifically cited Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA), all of which have posted double-digit gains in the past month, as examples of overbought securities vulnerable to pullbacks. The timing of the caution is significant, as the upcoming earnings season—especially for tech giants—is expected to introduce heightened volatility. Cramer noted that recent rallies have compressed valuation buffers, making current entry points less attractive. He cited a 12% rise in QQQ since the beginning of December and a 15% surge in NVDA's share price over the same period as indicators of overheating. Instead of chasing momentum, Cramer advocated for patience, suggesting that market pullbacks during earnings season could create superior entry opportunities. He emphasized that volatility is not a threat to disciplined investors but rather a signal of potential value. For growth-oriented portfolios, he recommended waiting for price dips of 5% to 10% in top-performing stocks before considering new positions. The advice is expected to influence both retail traders and institutional allocators managing large equity exposures. Sectors like Technology, Consumer, and Communication Services—where SPY and QQQ have heavy weightings—could see reshuffling as investors recalibrate risk exposure ahead of potential quarterly reports.