'RealMoney' Radio Wrap-Up: Time's Right to Own Tech

Ignore price targets and focus on earnings estimates, Jim Cramer said Thursday on his "RealMoney" radio show. And be a tech owner, not a renter.

Price targets don't matter, Cramer said in response to the hullabaloo over Lehman Brothers' decision to raise its price target for Google (GOOG Quote) to $350 from $275. The price target is less important than the fact the investment bank increased its 2006 full-year earnings estimate to $7.53, Cramer said. Previously, the highest estimate on the Street was $7.18.

It may sound heretical for somebody to put up a huge price target after the Internet bubble burst. But the math bears the higher price, Cramer said. If you use Yahoo!'s (YHOO Quote) multiple of 60 times 2005 earnings, then you could set a $450 price target on Google, he added.

But Cramer wants to be conservative, even with a stock like Google. So he stuck with his $350 target, which he bases on the company earning $7 a share next year -- not $7.53 as Lehman says. "That's still more realistic until I know more," Cramer said

And don't flip out on Yahoo!, Google or Intel (INTC Quote) if those stocks move up or down a few bucks, Cramer cautioned. "Stake out the ground and hold it," he said.

When a caller asked Cramer if Google would be better off splitting its stock, Cramer wasn't so sure that would be the smartest move. He pointed to Sears(SHLD Quote) and Google as great companies with managers who are disciples of Warren Buffett. Buffett, as most people remember, has yet to split Berkshire Hathaway(BRK.A Quote), which now trades for more than $80,000 a share.

And anyway, "splits get a lot of renters in" and Cramer wants people to own tech in this market, not rent.

Cramer added that investors should also keep an eye on Intel's earnings estimates in the coming weeks. He said he is confident that revenue and gross margins are going higher. That means earnings and the stock price will follow.