Watch the full interview with Katherine Ross in the video below:
Let's Talk About the Rotation
"Rotations seem like tremendous mysteries when they occur. They seem so oblique, hidden, even inexplicable," Cramer wrote in his Real Money column. "And then you look back and realize "what the heck was I doing still buying the industrial stocks at the top," or "why didn't I switch back to companies that have super growth no matter what." How did that rotation fool me!"
"Yes, they are that maddening. They can really sneak up on you. For example, go take a look at the last two months of charts for the stocks of Snowflake (SNOW) or DocuSign (DOCU) or CrowdStrike (CRWD) . Examine those of Square (SQ) , Tesla (TSLA) and PayPal (PYPL) . Take a hard look at Zscaler (Z) . You know what you see? You will see a whole bunch of patterns that look almost exactly the same. You will see stocks that had been in hideous decline and that decline ended right around May 12 of this year. Since then these stocks have been on an almost non-stop run-up. It's been torrid and, strangely, it's finally being talked about and noticed right now," he continued. "What happened that day to make things turn so hard? Was it something pandemic-related? Pre-opening, post-opening? Some wayward earnings number? Presidential proclamation? Covid variant? Nope."
Turning Our Attention to AppLovin
"Investors looking for a fast-growing gaming stock should take a look at the recently public AppLovin (APP) - Get Report, Cramer told viewers. In fact, this may be the greatest little stock you've never heard of," wrote TheStreet's Scott Rutt in his Mad Money recap. "AppLovin came public earlier this year to little fanfare. The company began as a provider of software development tools, but soon evolved into in-house game development and now boasts a portfolio of over 200 titles, most of them mobile games you can play on the go."
"Cramer said AppLovin's game portfolio would be impressive on its own, but the company also has a trove of valuable data it compiles from all of its customers, which helped it achieve a 73% compound annual growth rate between 2018 and 2020. AppLovin forecasts 80% growth in 2021," wrote Rutt.
"Shares of AppLovin trade at nine times sales, which seems pricey until you compare it to rivals like Roblox (RBLX) - Get Report at 16 times sales and Unity Software (U) - Get Report at 24 times sales with a lower growth rate," he continued. "That's why Cramer said AppLovin is a great business that's worth buying."