Jim Cramer says he likes Microsoft stock despite an analyst downgrade. Here's why

Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Tuesday's key moments. 1. Stocks were higher Tuesday as money flows into the tech-heavy Nasdaq. Club names Nvidia and Apple rose more than 3% and 1%, respectively. A steep pullback in oil price is helping the market bounce back from Monday's decline. Meanwhile, we shook up our portfolio early in Tuesday's session when we exited Procter & Gamble , which entered the day up 14% year to date. We decided to sell because the stock trades at a premium to the S & P 500 and is a defensive, lower-growth name. As the Federal Reserve cuts rates, we're looking for better growth opportunities. Jim Cramer said he's "heavily looking at the financials" as a place to gain more exposure. Banks kick off the third-quarter earnings season in earnest at the end of the week. 2. Wolfe Research upgraded Club name Wells Fargo to a buy-equivalent rating from peer perform. While the call came within a generally negative bank earnings preview, Wolfe analysts believe Wells Fargo's recent underperformance has de-risked the name. The lender's current valuation discount to financial peers also suggests that the removal of the Federal Reserve-imposed asset cap is no longer priced in, analysts argued. That's an opportunity, though, because the removal represents a high-single digital percentage tailwind to Wells Fargo's earnings-per-share power. "I expect a good number" when Wells Fargo reports earnings Friday morning, Jim said. 3. The long knives are out for the megacaps. Oppenheimer downgraded Microsoft to a hold-equivalent peer perform from outperform Tuesday, following Monday's downgrades of Amazon and Apple by other research firms. Analysts said they're concerned over losses at Microsoft-backed OpenAI, which could be in the range of $2 billion to $3 billion in fiscal 2025. They're also worried about heavy investments in AI chips and data centers overall, arguing much of the spending will not generate a return on investment within the next couple of years. Despite the call, Microsoft shares are bucking the downgrade Tuesday, adding almost 1% in the session. "When you get a downgrade on Microsoft and the stock doesn't get down… what people say is, 'Wait a second, time to bull Microsoft because we've got all these bears that are out," Jim said. "I like the stock of Microsoft right now." 4. Stocks covered in Tuesday's rapid fire at the end of the video were: PepsiCo , Affirm Holdings , Otis Worldwide , Qualcomm , and Disney . (Jim Cramer's Charitable Trust is long WFC, MSFT, AMZN, AAPL, DIS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.