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Investors continue to run away from enterprise software stocks, and it’s too soon to call the bottom in the group, CNBC’s Jim Cramer said Thursday.
The reason? Cramer said as long as the market is concerned about artificial intelligence disrupting their once-loved business models, it’s impossible to determine what investors are comfortable paying for these companies’ future earnings.
Cramer is referencing a stock’s price-to-earnings multiple, which he described as the “secret sauce” to understanding how a stock trades. It measures how much an investor is willing to pay for each dollar of future profits.
