Jim Cramer explains why the biggest names in tech are rallying

CNBC's Jim Cramer suggested Wednesday's record-breaking tech rally was bolstered by the promise of looser government regulations for the Magnificent Seven.
"They've done well, and now with the antitrust regulators out of their hair, I expect even better returns," he said. "At the very least, they only need to worry about innovation from other companies, not punishment from the Feds."

CNBC's Jim Cramer reviewed Wednesday's record-breaking tech rally, suggesting that the promise of looser government regulations, as well as innovative business, is driving stocks like the Magnificent Seven higher.

"They've done well, and now with the antitrust regulators out of their hair, I expect even better returns," he said. "At the very least, they only need to worry about innovation from other companies, not punishment from the Feds."

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The tech-heavy Nasdaq Composite broke 20,000 for the first time during Wednesday's session, finishing the day up 1.77% to post a new all-time high. The biggest names in tech, especially the Magnificent Seven — Nvidia, Alphabet, Amazon, Meta, Microsoft, Apple and Tesla — led the index higher, Cramer said.

Cramer examined why each stock saw gains, attributing some of their recent successes to the assumption that President-elect Donald Trump's new regulators will largely abandon efforts to curb big business' power. President Joe Biden's appointees have blocked a number of high-profile mergers and taken Big Tech to task, accusing companies like Apple, Alphabet and Amazon of illegal monopolistic practices. In particular, Cramer named Federal Trade Commission Chair Lina Khan, who spearheaded many of these antitrust efforts and just last month launched an investigation into Microsoft. Khan is likely to leave her position when Trump's term begins, and he has already tapped a replacement, Republican Andrew Ferguson.

But Cramer said he is "of two minds" about the situation, conceding that he understands why some believe these companies are too powerful. This dynamic could become a problem in the future, he continued, but stressed that the Magnificent Seven "are dominant because they're extraordinary" and gave them accolades for their products and profits.

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"We don't want our government to prosecute these megacap companies unfairly, and we don't want the government to bail them out, either," he said. "We just want these amazing businesses to compete for our affection and our dollars."