Jim Cramer Is “Sick and Tired” of Diversifying Into Stocks That Aren’t That Good
Jim Cramer went on live television and called out one of investing's most sacred rules, and the morning's earnings reports gave him some uncomfortable ammunition to work with.
Jim Cramer started Wednesday by pushing back on one of investing’s oldest rules. On CNBC the morning of October 28, 2026, as GE Vernova (NYSE:GEV | GEV Price Prediction) and GE HealthCare (NASDAQ:GEHC) both reported third-quarter results, he said: “I am sick and tired of people saying you’ve got to be diversified into things that aren’t that good. Okay, maybe you get lucky with GE HealthCare today, but these companies are great companies that are doing really well. And we turned on them; we turned on them. And I find myself thinking, what am I turning to?”
His point: if your best companies keep delivering, selling them to buy weaker businesses just to spread your money around can drag down your returns.
GE Vernova Hands Cramer His Strongest Evidence
Cramer pointed to gas turbines. Cramer said GE Vernova gas turbine orders rose from 7.4 gigawatts in the third quarter of 2025 to 16.6 gigawatts in the third quarter of 2026. The company’s third-quarter release backs up his point. Revenue rose 26.4% to $12.60B, and orders reached $29.30B, up 96% organically. Backlog hit $197.00B, and management expects it to exceed $200B in the fourth quarter. Gas equipment backlog plus slot reservations rose to 122 GW. Free cash flow guidance went up to $16-$17B. The stock is up 35.71% year-to-date.
Great Results, Stocks Investors Turned On
The “we turned on them” line matches the rest of his list. GE Aerospace (NYSE:GE) made $2.25 per share in adjusted EPS against a $1.99 consensus, reported orders up 49%, and raised full-year EPS guidance to $8.00-$8.10. Even so, its shares are down 1.25% year-to-date. Constellation Energy (NASDAQ:CEG) raised 2026 EPS guidance to $11.50-$12.50, yet the stock is down 26.71% this year. Vistra (NYSE:VST) reported Ongoing Operations Adjusted EBITDA up more than 30%, but its stock fell 10.71%.
He named GE HealthCare as the stock that got lucky. It beat with adjusted EPS of $1.34 against $1.20 expected and rose 7.94% in Wednesday trading. It is still down 6.22% year to date, and its full-year organic growth guidance is only about 4.0%.
Why Skepticism Keeps Hitting AI Infrastructure
Cramer also described how deep the doubt runs: “There’s an initial level of skepticism that is just so deep that you can be watching, as I was, the SK Hynix news come out and people just not buying it, people selling it down, people selling it down. And then they just say, listen, we’re going to buy as many shares as we can. We think this thing is very, very undervalued.” SK Hynix trades in Seoul and is not listed on a U.S. exchange. It is a memory partner to NVIDIA, whose last quarterly revenue of $96.22B more than doubled from a year earlier.
How Retirement Investors Should Weigh Cramer’s Argument
Diversification exists so that one holding can’t sink your plan. Constellation has fallen 33.73% over the past year even though its operations are strong. A retiree drawing income from a portfolio concentrated in that kind of name has no time to wait for a recovery.
Cramer has a point too. Owning weak companies to fill out a pie chart lowers quality and provides little real protection. Notice that GE Vernova, NVIDIA, Vistra and Constellation all depend on the same driver, data center power demand (we profiled seven suppliers riding that same expansion, from power to cooling, in a free report). Owning all four is one concentrated position.
For investors at or near retirement, the question is how large a high-conviction piece should sit beside a broad, diversified core. Cramer’s argument centers on quality within each piece. Diversification provides the most protection when holdings rest on different economic forces, and the least when weak companies are held only for the sake of variety.
Catalysts That Will Test the Thesis
Watch whether GE Vernova hits its target of at least 130 GW of gas equipment under contract by year-end. Also watch how NVIDIA’s next report compares with its guidance of $108.0B, and whether Constellation’s Crane restart stays on track for 2027.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
