In a recent segment on CNBC’s “Squawk On The Street,” financial commentator Jim Cramer advocated for the removal of Tesla Inc (Nasdaq: TSLA) from the group of mega-cap tech stocks known as the “Magnificent Seven.”
Comprising Apple Inc (Nasdaq: AAPL), Microsoft Corp (Nasdaq: MSFT), Alphabet Inc (Nasdaq: GOOG), Amazon Inc (Nasdaq: AMZN), Meta Platforms Inc (Nasdaq: META), NVIDIA Corp (Nasdaq: NVDA), and Tesla, the Magnificent Seven has historically outperformed broader markets.
Cramer argued that Tesla’s recent underperformance, with shares down approximately 16% since the beginning of 2024 and stuck in a longer-term downtrend since the end of 2021, justifies its exclusion from the elite group. He coined the term “Super Six” for a new index that excludes the electric carmaker.
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“Well, I got to tell you, the ‘Super Six’ is so strong, it’s amazing,” Cramer declared. “Catch that? ‘Super Six’ because Tesla is no longer.”
The decision is influenced by Morgan Stanley analyst Adam Jonas’ recent note, where he lowered Tesla estimates for earnings, margins, and free cash flow. Cramer expressed skepticism about a quick turnaround, citing Jonas’ cautious outlook.
Tesla is set to announce its quarterly results on Wednesday after the bell, and analysts, as per Benzinga Pro estimates, anticipate earnings of 74 cents per share on quarterly revenue of $25.547 billion.
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