Always be respectful of the power of hope, Jim Cramer reminded his Mad Money viewers Tuesday. There are many negatives in the stock market, including tariffs and escalating tensions with Iran, but when it comes to technology stocks in particular, hope springs eternal.
Tech stocks are typically strong going into the new year. This is when analysts begin making their bullish predictions for the year, and this year is no different. It's also the time when the annual CES conference sparks the interest of consumers, and this year is no different.
Tuesday, we heard from several semiconductor companies, like Advanced Micro Devices (AMD) - Get Report, which told us about the power of artificial intelligence. Meanwhile, shares of Microchip Technology (MCHP) - Get Report rose 6.7% on strong earnings.
Tesla's (TSLA) - Get Report Elon Musk had bullish things to say about electric cars in China, while here in the U.S., we have the 5G wireless rollout to look forward to. Social media advertising continues to flourish, while companies across the globe continue to move to the cloud and digitize their operations.
Cramer said investors still aren't late to the rally in tech, but they do need to be mindful of the market's recent gains and expect a short-term pullback. That's the time to be buying some of these high-quality tech stocks, he said, because things are looking promising for 2020 and beyond.
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Off the Charts: U.S. Dollar
In the "Off The Charts" segment, Cramer checked in with colleague Carley Garner over the direction of the U.S. dollar and what it could mean for the rest of the markets. We haven't heard a lot about currencies in recent months, as the dollar remained strong, but things could be changing.
Garner looked at a weekly chart of the dollar index, noting that the 100-week moving average is a key level for this chart. In 2014, the index crossed above the 100-week average and a big rally followed, while in 2017, crossing below the average kicked off a big decline. Currently, the index is approaching the average again, a warning sign for Garner.
A weakening dollar would be good news for gold however, as the precious metal needs a weaker dollar in order to continue its strong rally. On the flip side however, U.S. Treasuries are poised to fall if the dollar weakens, as Treasuries have under reacted to geopolitical events.
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Sportswear's Off and Running
Sportswear was in bull-market mode in 2019, but will the rally continue into 2020? Cramer dove into the outlook for Nike , Under Armour (UAA) - Get Report and Columbia Sportswear (COLM) - Get Report to find out.
Shares of Nike soared 37% in 2019. Now, under the leadership of John Donahoe, Cramer said the company is in great hands. He said Donahoe has an excellent track record at both eBay (EBAY) - Get Report and Service Now (NOW) - Get Report and should help to propel Nike to new heights. Shares do trade for 29 times earnings, however, and should only be bought on weakness.
Under Armour saw turbulent times in 2019 as the company struggled to deliver on earnings and recover from accounting issues. Shares peaked in July and have not recovered. Cramer said he remained skeptical of Under Armour and would not be a buyer until the company proves itself.
Finally, Cramer looked at Columbia Sportswear, a long-time favorite. He said Columbia continues to surge ahead with new products and brands and expand its reach. He said Colubmia, like Nike, is also a buy on any market-induced weakness.
Executive Decision: Harman International
For his "Executive Decision" segment, Cramer spoke with Dinesh Paliwal, president and CEO of Harman International, the home and auto electronics maker that is now a subsidiary of Samsung.
Paliwal said there's something special in the air at this year's CES conference. He said multiple technologies, like 5G wireless, smart devices and artificial intelligence are finally all coming together to create some terrific services for consumers. He said that 5G has been hyped for many years, but it's finally here and it's 100 times faster than existing services. 5G will usher in a whole new generation of services, he said.
When asked about gaming, Paliwal explained that Harman has sold over 100 million pairs of headphones and their latest gaming headsets offer immersive sound with up to 60 channels.
Finally, Paliwal said it's a great time to be a content creator, as steaming service are only getting more popular and 5G will be able to deliver them in new ways.
Time for Tesla
In his "No Huddle Offense" segment, Cramer opined on the news that Tesla's market cap now exceeds that of Ford (F) - Get Report and General Motors (GM) - Get Report combined. He said comparing market caps is a waste of time, because what the market really values growth, and Tesla has plenty of it. While Ford is stagnant and GM is shrinking, Tesla continues to grow like a weed, even in China -- where the company didn't have a factory last year, but it does now just one short year later.
Every time market caps jockey for position, the bears come out to declare the new pecking order is all wrong. But Cramer said you can't even compare a growth stock to a value stock, as they appeal to different classes of investors. He said until Tesla's valuation is twice that of Ford and GM, he's not worried.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Tuesday evening:
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