Jim Cramer says IPOs to come from speculative names in space, quantum computing and nuclear power
CNBC's Jim Cramer on Wednesday reviewed three sectors where highly-speculative names are gaining traction: space, quantum computing and nuclear power.
"I've tried to be skeptical of these three red-hot areas, but as I told you last week, once the thing really takes off, you can't be a scold," he said. "The market's saying, listen, these companies can raise some money, and I think we'll see scores more coming public."
This market is "engulfed in the kind of extreme speculation we have not seen in years, arguably since the nineties," Cramer said. While the averages headed lower on Wednesday, Cramer said the stocks of many companies that make no money and have little revenues are heating up.
Quantum computing stocks have seen a boost thanks to Nvidia's Jensen Huang, Cramer said. The CEO said at a conference on Wednesday that quantum computing is "reaching an inflection point," suggesting it will be useful in the coming years. Quantum computing is a rapidly-developing area of computer science that uses quantum mechanics to solve problems too complex for traditional binary computers. The bullish sentiment marks a change for Huang, who had previously indicated quantum computers could be put to real-life use in 15 to 20 years.
Cramer said it's easy to make a speculative pitch for quantum computing because it's so opaque. However, it's also hard to figure out which companies are the best because they have poor financials. He named some of the popular players in the space, including Rigetti Computing, IONQ, D-Wave Quantum and Quantum Computing.
Investors are also transfixed by nuclear power, Cramer said, as energy-guzzling data centers continue to spring up. Many hyperscalers prefer to use nuclear power because it is a relatively clean option, he added. Some on Wall street are bullish on power plant developer Oklo, even as the company loses money, Cramer said. Oklo is favored to build a power plant for the U.S., and it has plans to streamline processes, he said. He also said investors are excited about space and defense stocks like Voyager Technologies, whose shares soared after its upsized market debut on Wednesday.
According to Cramer, a wave of IPOs from these sectors is on the way, and it could rival or even exceed the boom of 2021 because the companies feel more substantive than some of the SPACs back then.
"As long as people are willing to pay up for the companies with no earnings and little revenue, these deals will keep coming and coming and coming," he said. "And the stocks will keep taking more money away from the mainstream companies like Nvidia that really make up the averages."
Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest smarter.Disclaimer The CNBC Investing Club Charitable Trust owns shares of Nvidia.
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