Jim Cramer says stock market rotation is shifting money
CNBC’s Jim Cramer said Wednesday that investors are watching a classic market phenomenon play out in real time: A violent rotation in which yesterday’s winners become cash cows and yesterday’s losers suddenly swing into their favor.
Cramer cautioned that these moments can feel chaotic, even irrational, but are often driven by valuation extremes that eventually tip back toward balance. He advised investors not to panic and remember that rotations are markets’ way of resetting extremes and creating the next opportunities.
“Sometimes things get crazy in stocks at the beginning of the year,” he said, adding that markets “have an astonishing ability to correct themselves right before your eyes.”
To explain, Cramer pointed to what he called the irony of Two Constellations.
Constellation EnergyThe long-beloved energy of hyperscalers seeking clean energy has surged nearly 185% in the past two years as interest in nuclear power explodes. That love affair has pushed the stock into dangerously expensive territory, making it vulnerable as investors begin looking for funds to redeploy elsewhere, Cramer said.
Meanwhile, Constellation Brands It moved in the opposite direction, eroded by rising costs, tariffs, changing drinking habits among younger consumers, and pressure from GLP-1 weight-loss drugs.
The result, Cramer said, is a stock that may have been penalized too heavily, trading at a valuation that doesn’t reflect the enduring value of its global beer, wine and spirits franchise.
Cramer said this type of reversal is not isolated and points to how retail stocks are changing roles as well.
Walmart He was richly rewarded last year for helping inflation-weary consumers. costco Delayed following internal changes and softer membership data.
But after the calendar changed, Cramer said money flowed from last year’s leaders to laggards, fueling Costco’s recovery after stronger-than-expected sales.
Cramer said the same pattern is emerging in technology.
Stocks that dominated portfolios in 2025 are now being cut to fund new positions elsewhere. This helps explain why Amazon He was the best performer among the Magnificent Seven this year. Nvidia It has struggled to gain traction despite continued bullish commentary.
