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.
8. Astera Labs Inc. (NASDAQ:ALAB)
Number of Hedge Fund Investors: 19
Astera Labs Inc. (NASDAQ:ALAB) is a prominent semiconductor company specializing in connectivity solutions for AI and cloud infrastructure. Despite the appealing buzzwords, Cramer was wary of Astera Labs Inc. (NASDAQ:ALAB)’s initial 72% surge and advised caution, as it seemed overpriced.
“The ninth-largest deal of the year is Astera Labs, which makes connectivity solutions for AI and cloud infrastructure—nice buzzwords there, but it sounds enticing. I didn’t like that it spiked 72% right out the gate—I told you so a few days later—just seemed way too expensive.”
Astera Labs Inc. (NASDAQ:ALAB) is well-positioned in a booming market driven by the growth of AI and cloud computing, which fuels high demand for its advanced connectivity products. Astera Labs Inc. (NASDAQ:ALAB) meets the increasing need for high-speed data transfer and modern computing infrastructure, making it a strong player in the evolving tech landscape.
Astera Labs Inc. (NASDAQ:ALAB) has built valuable partnerships and a robust customer base, highlighting its solid market position and potential for future growth. Despite some initial stock volatility due to high valuation spikes, Astera Labs Inc. (NASDAQ:ALAB)’ strategic focus and industry resilience point to promising long-term prospects. As the semiconductor industry grows with technological advancements, Astera Labs Inc. (NASDAQ:ALAB) is set to capitalize on these trends, offering significant value to investors.
Baron Discovery Fund stated the following regarding Astera Labs, Inc. (NASDAQ:ALAB) in its Q2 2024 investor letter:
“AI models are rapidly moving from objects of curiosity to levels of functionality that just a couple of years ago were believed to exist only in the realm of science fiction. We obviously do not invest in large-cap companies that produce AI hardware, which is where significant market attention is focused right now. Yet we continue to look for exciting small-cap ideas in AI hardware. For example, we owned a small-cap AI-oriented semiconductor company in the second quarter called Astera Labs, Inc. (NASDAQ:ALAB). Astera Labs manufactures analog semiconductors that facilitate improved communications within a motherboard (for example between graphics processing units like what NVIDIA makes and central processing units which are made by companies like Intel), and between servers.
We bought shares when the company went public, but due to the incredible hype surrounding hardware-based AI companies, the stock quickly doubled and exceeded what we believed was a reasonable long-term valuation (particularly given new competitive offerings on the horizon). Therefore, we sold our investment but continue to monitor its valuation closely for a potential re-entry point.”
7. Rubrik Inc. (NYSE:RBRK)
Number of Hedge Fund Investors: 28
Jim Cramer talks about Rubrik Inc. (NYSE:RBRK), a cybersecurity company that helps customers secure their data. Despite being a type of unprofitable software company that fell out of favor in 2022, Rubrik Inc. (NYSE:RBRK)’s focus on cybersecurity gives it an edge. Rubrik Inc. (NYSE:RBRK) had a strong debut and is currently up 11% from its offer price, though it has dropped since its initial trade.
“The next largest IPO is Rubrik, the cybersecurity firm that helps customers secure their data. This is the kind of unprofitable software company that went out of style in 2022 and never really came back, but it’s also a cybersecurity play, a much stronger cohort. Rubrik had a good debut, and it’s still up 11% from its offer price, but the stock’s also down from its first trade. I’d say the jury’s still out on this one.”
Rubrik Inc. (NYSE:RBRK) is well-suited to capitalize on the increasing need for robust data security solutions, as cyber threats become more sophisticated and regulatory requirements tighten. Rubrik Inc. (NYSE:RBRK)’s cloud-native technology stands out for its scalability and efficiency, addressing the needs of modern IT environments effectively.
Since its IPO, Rubrik Inc. (NYSE:RBRK) has shown resilience and potential for growth, maintaining a positive outlook despite market fluctuations. Rubrik Inc. (NYSE:RBRK)’s experienced management team, with extensive expertise in cybersecurity and enterprise software, is skilled in navigating the competitive landscape and driving strategic initiatives.
6. UL Solutions Inc. (NYSE:ULS)
Number of Hedge Fund Investors: 30
Jim Cramer highlights UL Solutions Inc. (NYSE:ULS), a company that tests consumer electronics and other products. UL Solutions Inc. (NYSE:ULS) is a for-profit spin-off from the nonprofit UL Standards and Engagement, known for its Underwriters Laboratories. Cramer has been impressed by CEO Jennifer Scanlon, who presented a strong case for UL Solutions Inc. (NYSE:ULS) on his show.
“Number six is UL Solutions, which helps test consumer electronics and other products. Now, this is basically a for-profit spin from a nonprofit entity, UL Standards and Engagement. Remember Underwriters Laboratories? They still control the business through a separate class of stock, but it’s a nice little business, and I’ve been impressed by CEO Jennifer Scanlon. She told a very compelling story when she came on the show. At this point, UL Solutions is the best performer in the top 10, up 96% from where it came public, up 60% from its first trade. We featured it twice. I bet it’s not done.”
UL Solutions Inc. (NYSE:ULS) is well-known for its rigorous standards and comprehensive services, earning it a trusted reputation in the industry. As safety regulations and standards become stricter across industries such as consumer electronics, automotive, and industrial sectors, the demand for UL Solutions Inc. (NYSE:ULS)’s certification and testing services is expected to rise. UL Solutions Inc. (NYSE:ULS)’s broad range of services, including product testing, certification, and advisory roles, allows it to meet the diverse needs of various sectors effectively.
Conestoga Capital Advisors stated the following regarding UL Solutions Inc. (NYSE:ULS) in its Q2 2024 investor letter:
“UL Solutions Inc. (NYSE:ULS): Based in Northbrook, IL, UL Solutions is a leading global business services company focused on independent testing, inspection and certification. For Conestoga, ULS is one of the very few initial public offerings we have participated in but the strong brand recognition, strong business model and operating history made it a fit for the Conestoga small cap portfolio. The company has historically grown revenues between 6%-8%, and we believe ULS has attractive margins and free cash flow.”
5. Paychex Inc. (NASDAQ:PAYX)
Number of Hedge Fund Investors: 34
Jim Cramer finds Paychex Inc. (NASDAQ:PAYX) to be a consistent performer despite its stock fluctuations. He notes that whenever the stock drops or faces negative analyst opinions, he advises buying it, and it often recovers well. Cramer believes Paychex Inc. (NASDAQ:PAYX), which offers a 3% yield, is a good buy at the current level. He suggests purchasing some shares now and buying more if the stock price drops further due to analyst downgrades.
“Paychex is funny. Every time it goes down, I tell you to buy it, and every time analysts don’t like it, they hit it. But what happens? It comes up smelling like a rose. I think Paychex, with a 3% yield, is a buy. I would buy some here and then wait for an analyst to knock it down and buy even more. The company is excellent. I’m a client.”
Paychex Inc. (NASDAQ:PAYX) represents an attractive investment opportunity due to its leading role in the payroll and HR solutions market, steady revenue growth, and resilient business model. Paychex Inc. (NASDAQ:PAYX) serves small to medium-sized businesses with a broad range of services, which has established its strong market position and competitive advantage. Its business model, which includes a mix of recurring revenue from payroll services and transaction-based revenue from other HR solutions, provides financial stability and predictability.
Paychex Inc. (NASDAQ:PAYX)’s essential services across various sectors help shield it from economic downturns, enhancing its resilience. Paychex Inc. showed strong financial results for both the fourth quarter and the full year, with total revenue increasing by 5% to $1.3 billion. Management Solutions revenue grew by 3% to $930 million. Paychex Inc. (NASDAQ:PAYX)’s focus on innovation through investments in technology and digital platforms is expected to drive further expansion. Additionally, its attractive dividend yield and reliable dividend payments showcase its commitment to delivering value to investors, making it appealing to those seeking income.
4. ARM Holdings (NASDAQ:ARMH)
Number of Hedge Fund Investors: 38
Jim Cramer expresses his positive view on ARM Holdings (NASDAQ:ARMH), noting that despite a significant drop in its stock price, the company’s business is showing strong growth. He believes that while investors are anxiously awaiting NVIDIA Corporation (NASDAQ:NVDA)’s results, ARM Holdings (NASDAQ:ARMH) presents a good buying opportunity, especially if NVIDIA reports favorable numbers.
“I like ARM. This stock has come down a great deal, and yet I think its business is actually accelerating. I think people are currently on tenterhooks waiting for NVIDIA, but ARM is a great stock to buy if NVIDIA reports good numbers.”
ARM Holdings (NASDAQ:ARMH) is a compelling investment opportunity due to its dominant position in the semiconductor industry and its expanding market reach. Known for its energy-efficient and high-performance processor designs, ARM Holdings (NASDAQ:ARMH) has established a significant presence in mobile devices, including smartphones and tablets. ARM Holdings (NASDAQ:ARMH)’s technology is now extending into burgeoning markets such as automotive, Internet of Things (IoT), and data centers, creating new revenue opportunities.
This diversification aligns with strong industry trends, as the demand for ARM Holdings (NASDAQ:ARMH)’s efficient chips grows with advancements in AI, edge computing, and connected devices. Strategic partnerships with major tech firms and ongoing investments in research and development further enhance ARM Holdings (NASDAQ:ARMH)’s market influence and innovative capabilities. Its business model, centered on licensing technology and earning royalties, ensures a steady and scalable revenue stream.
3. Reddit Inc. (NYSE:RDDT)
Number of Hedge Fund Investors: 39
Reddit Inc. (NYSE:RDDT) is a prominent social media platform known for its vast and active online communities, where users can share content and participate in discussions across a diverse range of topics. Jim Cramer discusses Reddit Inc. (NYSE:RDDT) as the eighth-largest IPO of the year. Although Reddit Inc. (NYSE:RDDT) surged more than 70% on its first day, it has since settled and is still up over 25% from its offer price.
“The eighth-largest IPO—jury’s not out on this—is Reddit. This one’s been a pleasant surprise, with the stock up more than 70% from its offer price, though most of that was the first-day pop. Since it started trading, though, Reddit is still up over 25%. That’s not bad.
After speaking to CEO Steve Huffman, a.k.a. “spez,” I think Reddit has the potential to be a good destination for advertisers, but the digital advertising market’s gotten tougher of late. That didn’t stop Reddit from reporting a pair of strong quarters since it became public. I say keep up the good work, spez—you’re going higher.”
Reddit Inc. (NYSE:RDDT) offers a strong investment opportunity due to its vast and active user base, which exceeds 500 million monthly users. This extensive community provides significant potential for advertising revenue and various monetization strategies. Reddit Inc. (NYSE:RDDT) is expanding its revenue beyond traditional display ads by investing in its premium subscription service, Reddit Premium, and exploring new advertising formats that target both broad and niche markets.
As the online advertising industry grows, Reddit Inc. (NYSE:RDDT)’s unique content and diverse user demographics make it increasingly attractive to advertisers, positioning the company to capture a larger market share. Reddit Inc. (NYSE:RDDT)’s focus on enhancing user experience, improving content moderation, and utilizing machine learning for better ad targeting further supports its growth. Additionally, Reddit Inc. (NYSE:RDDT)’s community-driven content distinguishes it from other platforms, reinforcing its potential for continued growth and market impact.
2. Raytheon Technologies Corp (NYSE:RTX)
Number of Hedge Fund Investors: 54
Jim Cramer shares his thoughts on Raytheon Technologies Corp (NYSE:RTX), a defense stock that faced a significant drop due to a recall of certain engines. During this downturn, Raytheon Technologies Corp (NYSE:RTX) bought back a large amount of its own stock, a move Cramer praises as one of Greg Hayes’ greatest achievements.
“Well, let me say this about RTX. When the stock went down really badly because of the recall of certain engines, the company bought a ton of stock. It was one of the greatest things Greg Hayes has ever done. Now Greg has just stepped down, and Chris Calio is in charge. I think he’s going to do a good job. At 21 times earnings, I like it very much. I like defense stocks, and this one is my favorite.”
Raytheon Technologies Corp (NYSE:RTX)’s broad portfolio, including advanced missile systems, avionics, and satellite technologies, is well-suited to benefit from increased global defense spending and the rising need for advanced aerospace solutions.
Raytheon Technologies Corp (NYSE:RTX)’s substantial order backlog reflects strong demand for its products and provides a clear path for future revenue growth. Its ongoing investment in research and development drives innovation in key areas such as hypersonic weapons and cybersecurity, giving it a competitive advantage. Moreover, Raytheon Technologies Corp (NYSE:RTX)’s strategic acquisitions, like its merger with United Technologies, have broadened its capabilities and market presence.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Investors: 184
Jim Cramer addresses recent changes in Apple Inc. (NASDAQ:AAPL)’s leadership, specifically the retirement of CFO Luca Maestri, a highly regarded executive known for his exceptional financial stewardship. Despite initial market reactions that saw Apple Inc. (NASDAQ:AAPL)’s stock dip slightly and prompted some to view the change with concern, Cramer remains confident in the company’s future. Maestri’s tenure saw Apple Inc. (NASDAQ:AAPL)’s revenue and earnings grow significantly, with Apple Inc. (NASDAQ:AAPL)’s market cap soaring from $547 billion to nearly $3.5 trillion.
“Apple’s C-suite is being shaken up, but I’ll tell you why it’s not shaking my confidence in the company going forward. Own it, don’t trade it. Apple’s stock briefly got rocked this morning after we learned that CFO Luca Maestri, one of the best in the business, is retiring. Luca is a hero. He’s been the steward of Apple’s cash and has done his best to add value for all shareholders, much better than almost every other CFO out there. So what happens to the stock upon the news of his retirement? It goes down a buck and a half in pre-market trading, and we get a host of notes saying that Luca’s decision is either a mild negative for the stock or a real negative—a reason to be worried and a cause of disappointment and concern.
It’s been 10 years for Luca, a little longer than the average CFO term, during which Apple’s revenues have compounded at an 8% annual clip, while its earnings compounded at a 15% clip. Apple’s market capitalization expanded more than six times, from $547 billion to nearly $3.5 trillion today. Luca has been incredible at planning the success of the service revenue stream, which is now close to $100 billion. He’s helped grow the company in key emerging markets like India, Turkey, Thailand, Malaysia, Brazil, and the UAE, which together are becoming a real force. I’d argue he’s been a genius when it comes to buying back stock, always purchasing it when it’s right, not just repurchasing shares by rote, as most CFOs do…
In the midst of an endless parade of commentators who want you to trade, many of whom make money if you trade, there is Apple—the one and only stock that’s run the way you want a company to run, which is why I always say own it, don’t trade it. I can’t think of a thing Apple does wrong when it comes to running the business day-to-day, and I know that Luca played a big role in that. The highest compliment I can pay is that I bet Kevin Park will do exactly the same.”
Apple Inc. (NASDAQ:AAPL) offers a strong investment opportunity due to its leadership in technology innovation, growing ecosystem, and solid financial health. Apple Inc. (NASDAQ:AAPL)’s recent product launches, including the iPhone 15 series, iPad Pro, and new MacBook models, showcase its commitment to cutting-edge technology and have been positively received by consumers, strengthening its market position. Apple Inc. (NASDAQ:AAPL)’s ecosystem, which integrates its hardware, software, and services, is expanding rapidly. Investments in its Services segment—such as Apple Music, iCloud, and Apple TV+—along with recent advancements in AI, are boosting recurring revenue and improving customer engagement.
Additionally, Apple Inc. (NASDAQ:AAPL)’s strategic investments in emerging technologies like augmented reality (AR), artificial intelligence (AI), and health technology, including the new Apple Watch Series 9, position it well for future growth and continued market leadership. Overall, Apple Inc. (NASDAQ:AAPL)’s innovation, expanding ecosystem, strong financial standing, and forward-looking investments make it an appealing investment choice.
While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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