Cramer says stocks that pulled back Tuesday still ‘have everything going for them’

CNBC’s Jim Cramer reviewed Tuesday’s market action, saying stocks that saw losses — like Nvidia and Eli Lilly — remain winners but had simply run too much.

“The stocks that pulled back today have everything going for them, except that they’ve already run so much that they’ve become vulnerable,” he said.

He underscored his belief that the greater a stock’s gains, the more vulnerable it is to losses, adding that the “greatest stocks of this very moment mostly got pummeled” while the “subpar performers of the last year finally had their day in the sun.”

Cramer used Nvidia, one of his favorite stocks, as an example. Nvidia shares were down a little over 2% by Tuesday’s close, saying this decline was due, in part, to worries about competition from Intel. The company unveiled its new artificial intelligence chip, the Gaudi 3, and claimed it is faster and more power efficient than Nvidia’s H100 GPU. He conceded that Intel’s claim is possible “in some categories” — but the company won’t be competing with H100, he pointed out. It will instead face Nvidia’s new chip, Blackwell, which is expected to be more advanced than its predecessor.

Eli Lilly also declined on Tuesday, down 2.6% by the close. Cramer said that setback isn’t warranted, noting the only recent news surrounding the pharmaceutical behemoth is that it just started construction on a factory in Germany to make its weight loss drug. Cramer said he’d be a buyer of the stock “after the dust settles.”

He also suggested tax season played a role in deciding Tuesday’s winners and losers.

“What a terrific time to take some profits of winning stocks to pay for the stocks’ gains,” Cramer said. “But if you own the losers, you’ve got no taxes to pay, so no tax-related selling pressure to speak of versus these winners.”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia and Eli Lilly.