CNBC

Cramer Remix: Owning Apple may get rocky, so hold on tight

Cramer Remix: Owning Apple may get rocky, so hold on tight · CNBC
Tyler Clifford
Updated

In This Article:

  • "You need to strap yourself to the mast if you're gonna hold onto this one, as we've done for my charitable trust," CNBC's Jim Cramer says.

  • Apple's supply chain is deeply embedded in China, and Goldman says they can't move their production any time soon," the "Mad Money" host says.

  • "So if the Communist Party does anything to limit iPhone production ... the consequences could be serious, especially with the next iteration set to come out this fall," he says.

CNBC's Jim Cramer continues to suggest that investors should own Apple's stock and not trade it, even as the company weathers the storm of the prolonged trade war.

"You need to strap yourself to the mast if you're gonna hold onto this one, as we've done for my charitable trust," the "Mad Money" host said Wednesday.

Earlier that day, a Goldman Sachs GS analyst said that Apple's earnings could tank almost 30% if China bans its products in retaliation to trade tensions. The iPhone maker's share price plunged more than 2% during the trading day.

"Worse, Apple's supply chain is deeply embedded in China, and Goldman says they can't move their production any time soon," Cramer said. "So if the Communist Party does anything to limit iPhone production ... the consequences could be serious, especially with the next iteration set to come out this fall."

There was no secret that Apple had high exposure to China, but Goldman Sachs' analysis was unexpected, Cramer said.

Apple has yet to reveal  how tariffs have impacted business, he continued. The company's ecosystem employs millions in China, so it would make more sense for the country to go after firms that make products in America, he said.

"But if President Trump keeps blacklisting Chinese technology companies ... they might feel compelled to go after Apple," Cramer said. "I still believe you should own Apple. I'm not trading it."

Trade impact

Cramer said that market volatility could get worse before it gets better as U.S.-China trade tensions drag on.

A day after major U.S. indexes traded in the green, the Dow Jones Industrial Average sank more than 100 points Wednesday, the S&P 500 dropped 0.28% and the Nasdaq Composite fell 0.45%.

"I'm not saying you should skedaddle from every stock with meaningful Chinese exposure," the he said. "I just want you to know what you own so you're not surprised when this pattern continues. That way, you'll be able to buy stocks that get marked down for the wrong reasons the next time the whole market gets hammered."

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