The flood of IPOs is the market’s biggest risk right now

The stock market is being flooded with new initial public offerings and many of the best performers in the 2019 class aren’t worth chasing at current levels, CNBC’s Jim Cramer said Thursday.

“Given the big jumps in stocks like Zoom and Pinterest, and those weak numbers and forecast from Intel tonight, I’m starting to worry that this IPO cycle – especially the tech portion – may be reaching irrational exuberance territory,” the “Mad Money” host said.

Cramer likes to see stock prices run higher, but the deluge of frothy IPOs is not a good sign in his eyes.

“The stock market’s all about supply and demand. When you flood it with new supply, that puts real pressure on the averages,” he said. “Every time we get another one of these deals that’s engineered to be red hot, money managers need to sell something else to raise cash if they want to participate.”

Cramer said his fear is that the deals will become less rewarding, leaving investors burned and turning against stocks as an asset class. He’s even more fearful of that than low earnings, the U.S.-China trade war, or a hawkish Federal Reserve.

Get his full insight here