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NEW YORK (TheStreet) -- It's time to anoint a new stock to the list of cult classics that seem to defy gravity, Jim Cramer told his Mad Money viewers Monday. That stock is Ambarella (AMBA), the mobile chip maker that has its chips inside every GoPro (GPRO) camera.
What's a cult stock? It's one that trades purely on momentum and not by any traditional valuation metrics. The stocks of Amazon.com (AMZN), Netflix (NFLX), Tesla Motors (TSLA) and most recently Shake Shack (SHAK) are all enshrined in the cult stock hall of fame.
What makes Ambarella so special? For starters the stock is up over 100% for the year, Cramer noted. When the company last reported, revenue soared by 73%, allowing the company to trounce Wall Street estimates. Management also spoke positively about seemingly endless growth from body cameras, aerial drones, cameras in your car and even in your household doorbell.
But Cramer said it's difficult to recommend a stock that's already had such a huge run, even if its earnings may justify the price in a few years. Stocks that go straight up almost always end badly. Sometimes you just need to admit that you missed it, he concluded.