After the recent stock market rally, stock market expert Jim Cramer explains why buying near highs is risky – and which stocks still offer long-term potential.
• Cramer warns against buying stocks near highs
• Strong rally increases setback risks
• Opportunities in selected quality stocks
After the recent rally on the international stock markets, well-known US stock market expert Jim Cramer urges caution. The CNBC host advises investors against buying stocks that are already near their annual or all-time highs. According to Cramer, this is often “a license to lose money,” as he explained on his January 7, 2026 CNBC show Mad Money.
Jim Cramer warns: Investors should become more selective after the rally
According to the expert, investors should be much more selective after the strong run of the markets. He also emphasized that investors should not make the mistake of chasing strong stocks.
Specifically, Cramer warned in his broadcast against buying stocks that have already gained 30 or 40 percent in the current year. Instead, he advised waiting patiently for better entry opportunities. The market has recently gained significant momentum, which increases the risk of setbacks.
Expert sees risks in oil and bank stocks
Cramer was particularly critical of oil stocks. He warned of a “late-cycle euphoria” in this sector. Investors who bought oil producers near their recent highs could be vulnerable if Venezuela ramps up production, putting additional pressure on crude oil prices.
Cramer also sees short-term risks with bank stocks – especially in the run-up to the upcoming reporting season. Although he continued to describe the sector as chronically undervalued, fluctuating expectations and cautious outlooks could weigh on prices.
As an example, he cited JPMorgan Chase, which is cheaply valued at around 16 times earnings. But at the same time, he warned that CEO Jamie Dimon tends to emphasize risks during periods of strong economic conditions – comments that can put pressure on the stock in the near term.
NVIDIA and Co.: Why tech stocks could remain interesting in the long term
Despite his warnings, Cramer still sees opportunities in the tech sector. During the CNBC broadcast, he referred to CrowdStrike, whose shares had fallen significantly since their November highs before recovering somewhat. Geopolitical instability – such as Venezuela’s political upheaval – has historically led to more hacker activity and thus increased demand for cybersecurity solutions, Cramer continued.
In the same breath, he praised NVIDIA CEO Jensen Huang, who at CES 2026 described CrowdStrike as a key cybersecurity provider securing the $10 trillion enterprise transformation through artificial intelligence. Cramer also reiterated his trust in Microsoft, which temporarily corrected significantly in the third quarter of 2025 after the strong quarterly figures due to high AI investments. He also highlighted his long-time favorites, NVIDIA and Broadcom. “In any case, you should own some unloved tech names, but have room for high-quality consumption[aktie] let it go,” summed up the expert in his CNBC show.
His conclusion for investors is that restraint is the order of the day after strong price increases. If you remain patient and pay attention to quality and cheap entry levels, you could do better in the long term than buying near the highs.
Bettina Schneider / editorial team finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
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