Sell volatile stocks in quantum computing

CNBC’s Jim Cramer on Wednesday warned investors against staying in volatile stocks — especially related to quantum computing — urging them to be wary of market froth.

“I can’t be part of this froth,” he said. “I always want you to stay in this game, but I couldn’t save the people who refused to sell their red-hots. They were too greedy. And then they were too poor.”

According to Cramer, Wall Street isn’t paying enough attention to froth, primarily the fervor for companies that aren’t doing so well. He said when these popular companies get overextended, investors need to tread carefully because it means buyers are getting carried away with concepts, not necessarily earnings or sales.

Cramer in particular pointed to quantum computing, a sector he thinks has been “the worst of the excess” that got hit hard on Wednesday. He attributed this decline to remarks from Nvidia CEO Jensen Huang, who said useful quantum computers are many years away. Quantum computing stocks took a nose dive by close, with Rigetti down 45.41%, IonQ plummeting 39%, D-Wave Quantum tumbling 36.13% and Quantum Computing sinking 43.34%.

But according to Cramer, it’s not too late to get out of these stocks. All of these companies had been losing a lot of money and had disappointing revenue, Cramer said, adding that speculating on those names was “a dangerous game of musical chairs.”

“I think all these frothy stocks remain vulnerable,” he said. “You own a stock with AI in the name, you could be in trouble. You own a hyped-up alternative energy company, especially one connected to nuclear power, you need to ring the register tomorrow. They’ve come too far too fast for a technology that can take over a decade to deploy.”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia.