Jim Cramer: Mastercard Is a Tech Company in Bank Clothing

On the July 21 episode of CNBC's Mad Money, host Jim Cramer reviewed Mastercard Incorporated (NYSE:MA) using options trader Bob Lang's analysis of the daily chart of the stock. Cramer highlighted the company as a premier vehicle for investors seeking to rebalance away from pure tech without sacrificing growth or high-margin processing power.

Analyst's Rationale

Cramer pointed out that Mastercard is not a traditional bank but a tech company operating in payments. This classification gives it the high growth and fat margins typical of tech firms, combined with relative stability akin to the banking sector. He emphasized that the company's business model, based on processing fees, makes it less vulnerable to economic fluctuations compared to traditional banks.

Context

These remarks come at a time when investors are diversifying away from the volatile tech sector. Payment companies like Mastercard are attractive because they offer a blend of growth and stability. The stock has performed well over the past year, supported by the global increase in digital payments.

What to Make of It

Cramer's comments reflect a positive long-term view of Mastercard, especially for investors seeking tech exposure with lower risk. However, investors should conduct their own research and consider factors such as valuation and competition before making investment decisions.