Jim Cramer said it's totally acceptable to fall in love with the innovators looking to shakeup the automotive industry, but investors should approach stocks like Nio and Fisker with caution.
"It's our job to say 'we know you want to own them, but here's a warning,'" Cramer said.
The most important thing to keep in mind is valuation, Action Alerts PLUS research analyst Zev Fima said. Cramer agreed, citing how Fastly (FSLY) - Get Report came down after surging $20 in one day of trading.
Fastly shares were down more than 28% Thursday after the cloud-services company warned on Wednesday that third-quarter revenue will miss forecasts. Fastly said to expect revenue of between $70 million and $71 million, compared with previous guidance of at least $73.5 million.
“Due to the impacts of the uncertain geopolitical environment, usage of Fastly’s platform by its previously disclosed largest customer did not meet expectations, resulting in a corresponding significant reduction in revenue from this customer,” Fastly said in a statement.
Adding to Fastly's pain were downgrades from several analysts, including Baird's William Power, who cut his recommendation to neutral from outperform and lowered his one-year price target to $85 from $105.
Fastly's biggest customer is ByteDance, the embattled owner of video-streaming app Tiktok.
To sum it up, follow Cramer's golden rule and do a little homework before you do a little buying.
Here's what Cramer is watching into next week: