In this article, we’ll explore the 10 Stocks that Jim Cramer Believes Will Soar.
On a recent episode of Mad Money, Jim Cramer reflects on Wall Street’s favorite GPU maker’s remarkable journey and current status in the stock market. After the sharp decline three weeks ago, caused by the sudden sell-off linked to the yen carry trade, the market is rebounding.
“We’ve had a remarkable run from the lows three weeks ago as we realized that the forced selling caused by the implosion of the yen carry trade is merely temporary.”
Cramer notes that the Federal Reserve’s upcoming rate cuts should support this recovery. However, Wall Street has become more selective, and investors are less forgiving of mediocre results now that the market has rallied significantly.
“Now the Fed is our friend again with rate cuts on the way, starting at next month’s Federal Open Market Committee meeting. At the same time, though, after such a spectacular rally, Wall Street’s gotten a little more discerning. Investors are no longer willing to give companies a pass for less-than-stellar results once we reach more elevated levels. That’s what happens—the exuberance goes away. Now we’re in a tricky moment that feels like a race against time.”
Cramer emphasizes that the current economic climate is uncertain. The economy is slowing, and while the Fed’s rate cuts are expected to help, their impact is unpredictable. The effectiveness of these measures and the extent of the economic downturn remain unclear.
“While the economy is slowing and we know the Fed rate-cut cavalry is riding to the rescue, we just don’t know how effective it will be and how bad things will get before Fed Chief Powell manages to turn the tide—and he will. We need to figure out how quickly the economy will deteriorate and how quickly the rate cuts will work their magic. Both of these are judgment calls, and we don’t necessarily have enough data to decide either way. We never do at this point in what we call the economic cycle.”
Jim Cramer: In my 43 Years on Wall Street, I’ve Never Seen Anything Like This
According to Cramer, Nvidia has captured extraordinary attention from investors. He describes it as a groundbreaking company, now valued at $3.2 trillion, a dramatic increase from $580 billion just 18 months ago. Cramer highlights its dominance in the semiconductor industry and its influence on technology, particularly in artificial intelligence.
“I searched for comparisons and came up grasping at something ethereal to describe this incredible $3.2 trillion company, which was worth just $580 billion 18 months ago. It has captivated not just investors but people far removed from the stock market. It’s almost miraculous how many have had life-changing experiences because of this single stock.”
Despite its impressive achievements, Cramer notes that the stock’s performance will be scrutinized closely. He points out that the company’s quarterly results need to surpass high expectations, including significant revenue beats and strong future guidance.
“But tomorrow, the stock will descend into mere mortality, and I feel compelled to explain why. Why does it hold such a high status, and why can it never fully live up to the hype of its $3.2 trillion market cap based solely on one quarterly report? The quarter is about it beating earnings estimates, topping revenue numbers, and crushing forecasts. The stock has run so high that it needs a $2 billion revenue beat and guidance that’s $2 billion higher than expected, along with a bullish conference call discussing a strong roadmap. And let’s not forget a gigantic buyback because the company has too much cash sitting idle.”
Cramer concludes that the company’s technology is so advanced that it’s difficult to fully grasp its future potential. Despite this, he believes the company’s achievements should be celebrated, and the stock might still hold significant upside surprises.
“The bottom line: I don’t want to be poetic, but it excels in ways that are unmatched. We should celebrate its achievements and bring on those upside surprises.”
Our Methodology
In this article, we examine a recent episode of Jim Cramer’s Mad Money, where he highlighted ten stocks with strong potential for growth. We also analyze hedge fund perspectives on these stocks and rank them according to hedge fund ownership, from the least to the most.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Stocks Jim Cramer Believes Will Soar
10. Lineage Inc. (NYSE:LINE)
Number of Hedge Fund Investors: N/A
In a recent episode of Mad Money, Jim Cramer discussed several promising stocks, starting with Lineage Inc. (NYSE:LINE), the cold storage warehouse REIT. He previously highlighted Lineage Inc. (NYSE:LINE) as the year’s largest IPO, noting that while it has risen more than 10% since its debut and nearly 5% since it began trading, its performance has been relatively flat since his last update at the end of July.
“Let me walk you through them one by one because we’ve got some real winners here. So far, the year’s largest IPO is Lineage, the cold storage warehouse REIT, which I highlighted about a month ago. I like the story, but we were still waiting on some key information like the size of the dividend, and we’re still waiting on it. Lineage is up more than 10% since it came public, almost 5% since it started trading, but it’s down roughly flat from where it was trading when I covered it at the end of July.
Last week, the analyst quiet period ended on Lineage, and the stock got a smattering of buy and hold ratings from Wall Street. I still think it has plenty of promise, but I can’t endorse it until I know what the size of the dividend is going to be.”
Lineage Inc. (NYSE:LINE) offers a promising investment opportunity due to its strong position in the growing cold storage sector. Lineage Inc. (NYSE:LINE) benefits from the increasing demand for cold storage driven by e-commerce and the need for storing perishable goods. Since its IPO, Lineage Inc. (NYSE:LINE)’s stock has risen over 10%, showing strong performance despite market fluctuations. This growth is supported by long-term leases with major tenants, providing stable revenue.
Lineage Inc. (NYSE:LINE)’s strategy of expanding through acquisitions has further strengthened its market presence and asset base. Positive analyst ratings suggest confidence in Lineage Inc. (NYSE:LINE)’s future prospects, and the experienced management team is well-prepared to guide the company’s ongoing success.
9. Amer Sports Inc. (NYSE:AS)
Number of Hedge Fund Investors: 14
Jim Cramer discusses Amer Sports Inc. (NYSE:AS), a company known for brands like Arc’teryx, Wilson tennis gear, Salomon winter sports equipment, and Louisville Slugger. He advised against investing in Amer Sports Inc. (NYSE:AS) shortly after its IPO, citing concerns about its weak balance sheet, significant exposure to China, and the fact that Chinese companies still hold a controlling interest.
“Third, AM Sports is the sporting goods and outdoor apparel company best known for Arc’teryx, Wilson tennis gear, Salomon winter sports equipment, and the iconic Louisville Slugger. Now, I told you to steer clear of this one the day after it came public. I didn’t like the subpar balance sheet, the exposure to China, and the fact that Chinese companies still own a controlling interest. Since then, AM Sports is up just over 5%, and the S&P is up about 15%. That’s after the company reported a better-than-expected quarter last week that gave you a nice bounce, but call me dubious.”
Amer Sports Inc. (NYSE:AS) stands out as a strong investment opportunity because of its valuable brand portfolio, improving financial health, and growth prospects in the sports and outdoor sectors. Amer Sports Inc. (NYSE:AS) owns leading brands like Arc’teryx, Wilson, Salomon, and Louisville Slugger, which are known for their quality and innovation.
Recent financial reports show that Amer Sports Inc. (NYSE:AS) is turning a corner, with better profitability and operational efficiency, thanks to smart investments in its key brands. The growing global interest in outdoor activities and sports is driving demand for Amer Sports Inc. (NYSE:AS)’ products, which fit well with current health and wellness trends. Furthermore, Amer Sports Inc. (NYSE:AS)’s efforts to expand its product lines and enter new markets are expected to fuel further growth and increase its market share.