• CNBC's Jim Cramer on Tuesday broke down the the top 15 performers in the Russell 1000 during the month of July, telling investors what he thinks might just be market froth.
• "If you want to spot froth, you need to keep an eye on the stocks that are soaring and figure out if there's anything real behind those moves or if they're phony," Cramer said.

CNBC's Jim Cramer on Tuesday warned investors about market froth and gave his take on the top 15 performers in the Russell 1000 during the month of July.

Froth can be a hard market condition to define, but it usually occurs when an asset's price starts to rise beyond its intrinsic value, Cramer said.

Sometimes froth happens when the stock of a poorly performing company spikes before the whole enterprise goes under, Cramer said. He pointed to Bed Bath & Beyond stock's series of spikes before the business filed for bankruptcy, as well as Cramer the GameStop short squeeze of 2021, when many investors came together to drastically push up a heavily shorted stock.

"Those are two versions of froth, which again, is a curse word in this business, because froth means lots of people are trying to make money in a completely unsustainable way," Cramer said. "If you want to spot froth, you need to keep an eye on the stocks that are soaring and figure out if there's anything real behind those moves or if they're phony."

To help investors spot market froth, Cramer discussed July's top 15 stocks in the Russell 1000, a benchmark index that ranks the top 1,000 companies in the U.S. by market capitalization.

1. QuantumScape: Cramer said he's wary of battery-technology company QuantumScape's gains, up 66% this month. According to Cramer, the company has been losing money for years, and it has a poor revenue stream. He thinks the stock jumped because the company recently appointed a new president and advised investors to sell.
2. Roku: Roku's stock rallied 50% in July, and Cramer thinks this move makes sense because the platform is becoming essential to streaming networks. However, he said he can't recommend the company because it continues to lose money.
3. Western Alliance: Western Alliance's stock plunged from $71 to $26 in three days when Silicon Valley Bank failed, but Cramer said he thinks July's rally is justified due to the bank's genuine deposit growth this quarter.
4. Zions Bancorp: Cramer linked Zions Bancorp with Western Alliance, saying even though the stock was up 42% last month, it still has room to run.
5. Tandem Diabetes Care: Cramer called Tandem Diabetes Care's too frothy. The company recently received Food and Drug Administration clearance for a device it's touting as the world's smallest and most durable insulin pump. Yet, Cramer pointed to the fact that the company has had positive net income only once in the last six years.
6. Coinbase: Cramer was hesitant to make a judgment about Coinbase, a cryptocurrency exchange platform, because of the onslaught of crypto lawsuits brought on by the Securities and Exchange Commission. He said "the jury's out" on the company until its earnings report next week.
7. SoFi: Cramer suspects online bank SoFi's stock will keep climbing, having jumped 37% last month. He said the company took in a large amount of depositors even as other banks saw customers flee. SoFi now has 6.2 million members.
8. Pinnacle Financial: Cramer said Pinnacle Financial delivered weaker numbers and suboptimal deposits. He said the company might seem frothy, but the stock should never have been so low in the first place.
9. KeyCorp: Like Pinnacle Financial, Cramer said KeyCorp also delivered weaker figures. With the company's 6% yield, Cramer said it should be bought, stressing the company should never have been so cheap.
10. Lyft: Cramer said ride-share company Lyft has been rising because of new management that is committed to turning a profit.
11. Palantir: The hype around cybersecurity company Palantir is not frothy, according to Cramer. He said the company had a terrific quarter and has more upside.
12. Robinhood: Cramer called Robinhood frothy, saying the stock jumped last month because a high profile money manager bought a lot of it and then sold it, not because of its new retirement program.
13. New Relic: Cramer said software company New Relic saw gains because of its takeover bid, but added he thinks the stock is done climbing.
14. Newell: Consumer goods company Newell, known for brands like Sharpie and Rubbermaid, rallied 28% in July. Cramer thinks it can go higher. He said it's been struggling for years, and he pointed out that new management was able to generate significant free cash flow.
15. Comerica: Cramer said he bet Comerica has more upside due to its innate earnings power, seeing its stock climb 27% last month.

"When you look at the biggest winners in the Russell 1000 last month, I'm very happy to say that the vast majority of these stocks, aside from QuantumScape and Robinhood, represent real substance, not just thin gruel froth," Cramer said. "I think most are reasonable snap-back stories that deserve their July gains."

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