In this article, we’ll be going over 10 stocks Jim Cramer is talking about right now. To see more of these stocks, you can go see 5 Stocks Jim Cramer Is Talking About Right Now.
“We’re In A Vast Slowdown In A Titanic Boom”
On June 1, CNBC’s Mad Money host Jim Cramer began unraveling the confusing economic situation the US population is faced with today. He began by noting the worrying performance of the major stock indices, such as the Dow Jones Industrials, which was down by 134.51 points on June 1, the S&P 500, down 0.61%, and the Nasdaq Composite, down 0.63%. These numbers heading into June were described as “contradictory” by Cramer, leaving analysts, investors, and financial professionals of all forms confused about what is to follow. As far as Cramer is concerned, “this paradox will only get resolved over time.” Here are some comments from the Mad Money host on the current economic situation brewing in the US:
“Unfortunately, for some ill-advised reason, we might not have time. There are only two weeks before the next Fed meeting, and as far as I can tell, there are plenty of Fed heads who believe they need to keep raising interest rates rather than take their time to assess the situation. They don’t wanna wait. They want to tip us into a definitive recession.”
“If You Look At Wage Data, Housing Data, The Economy Is Booming”
An undeniable trend developing within the American markets and economy is the increase in housing prices. Cramer noted this trend in his episode as well, stating that housing prices and rents are going “relentlessly higher.” He added that the American job market is also doing well, with it hosting “far more jobs than potential workers.” Based on these two factors, Cramer noted that the US economy does seem to be doing well. However, this positive performance seems to be restricted to these areas alone, with almost every other area “has gotten soft.”
It’s this weakness in the economic data for all other areas in the economy that makes Cramer believe that the US might actually be heading for a recession. This data also makes him suggest that the Fed should maybe hold off on rate hikes for June because the data is already too weak, and the economy may not be able to handle another hike just yet. To substantiate his belief, Cramer dives into various economic factors that support the claim that the US economy may be going through a slowdown.
Evidence of Economic Slowdown
The first factor of significance for Cramer was the decline in commodity prices across the US. The fact that oil and natural gas stocks have been taking a beating so far in the US seems to imply that the economy is going through a “severe slowdown.” The second indicator is “a breakdown in retail earnings and forecasts.” The earnings posted by most retail companies seem to be underwhelming and discouraging so far. Cramer went as far as stating that the retail industry’s charts are so “damaged” that you can’t ignore the fact that the industry has taken a severe hit, resulting in its weakness.
Another worrying trend is the slowdown in the auto industry, one that has always remained ahead of its peers, as Cramer implies. A major company within this industry, Advance Auto Parts, Inc. (NYSE:AAP), closed the first quarter with a dismal performance, something that came as a shock to many considering the fact that this has remained a “consistently strong company” for a long time, as Cramer noted. The stock is currently down by 55.42% year-to-date as of June 3. Cramer believes that the performance of this company signals “a slowdown in the auto business” in general.
Next, we have the mini-banking crisis that the US went through recently. Here are some of Cramer’s comments regarding the banking crisis:
“It rocked the financial system and it’s still being felt as banks that I’ve talked to have had to cut down on lending and are taking less risk. There’s a loan pipeline that was going full tilt as late as April but that has now been curtailed, perhaps dramatically.”
Moving on, Cramer noted that the slowdown in the Chinese economy is also having an effect on the American economy. Add to this the lay-offs and firings prevalent across the tech and finance industries on top of everything else, and you have a somewhat accurate picture of how Cramer sees the US economy is coming to be shaped by this time in 2023. These are also the factors motivating him to argue that the Fed should hold off on any more interest rate hikes at present. Despite all this, though, Cramer continues to talk about a wide variety of stocks that he believes can still perform well even in the current market conditions. They include several renowned names such as Meta Platforms, Inc (NASDAQ:META), Advanced Micro Devices, Inc (NASDAQ:AMD), and Tesla, Inc. (NASDAQ:TSLA), among many others. A major focus for Cramer at present is the artificial intelligence sector, considering the leaps being made by tech companies in this space in light of new developments. Keeping this and the above factors in mind, we have covered some of the stocks Cramer is remaining bullish on today.
Our Methodology
To come up with our list of stocks, we watched Jim Cramer’s Mad Money episode from May 31 and an additional Lightning Round episode from May 26. In both these episodes, Cramer went through the winners and losers of 2023 and, consequently, the stocks one should consider buying and other stocks one should avoid. We selected the stocks that Cramer was bullish on for this article and ranked them based on the number of hedge funds holding stakes in them, using Insider Monkey’s hedge fund data for the first quarter. The stocks are ranked from the lowest number of hedge funds holding stakes in them to the highest.
10 Stocks Jim Cramer Is Talking About Right Now
10. Sempra (NYSE:SRE)
Number of Hedge Fund Holders: 31
Cramer claims to be partial to “anything that’s liquefied gas” and states that Sempra (NYSE:SRE) is the right move for any investor interested in this area.
At the end of the first quarter, 31 hedge funds held stakes in Sempra (NYSE:SRE), with a total stake value of $401 million.
9. Zscaler, Inc. (NASDAQ:ZS)
Number of Hedge Fund Holders: 38
Zscaler, Inc. (NASDAQ:ZS) was spotted in the portfolios of 38 hedge funds in the first quarter, with a total stake value of $490 million.
Analysts at Baird hold an Outperform rating and a $165 price target on the stock as of May 26.
Cramer sees Zscaler, Inc. (NASDAQ:ZS) as a “gold mine” after its performance in the first quarter.
Like Meta Platforms, Inc. (NASDAQ:META), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Tesla, Inc. (NASDAQ:TSLA), Zscaler, Inc. (NASDAQ:ZS) is a stock on Cramer’s radar these days.
8. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 82
Daniel Ives at Wedbush holds an Outperform rating on shares of Tesla, Inc. (NASDAQ:TSLA) as of May 30, alongside a price target of $215.
According to Cramer, Tesla, Inc. (NASDAQ:TSLA) is the stock leading the consumer discretionary sector as of this June. The stock is up by 97.94% year-to-date as of June 3.
There were 82 hedge funds long Tesla, Inc. (NASDAQ:TSLA) in the first quarter. Their total stake value was $6.4 billion.
Citadel Investment Group was the most prominent shareholder in Tesla, Inc. (NASDAQ:TSLA) at the end of the first quarter, holding 68.2 million shares.
Baron Funds mentioned the company in its first-quarter 2023 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”
7. Palo Alto Networks, Inc. (NYSE:PANW)
Number of Hedge Fund Holders: 87
Palo Alto Networks, Inc. (NYSE:PANW) seems to be Cramer’s preferred cybersecurity stock pick, based on his lightning round on May 26.
Our hedge fund data shows 87 funds long Palo Alto Networks, Inc. (NYSE:PANW) in the first quarter, with a total stake value of $3.9 billion.
Analysts at Deutsche Bank hold a Buy rating on Palo Alto Networks, Inc. (NYSE:PANW) as of May 24. They also raised their price target on the stock from $210 to $225.
TimesSquare Capital Management mentioned Palo Alto Networks, Inc. (NYSE:PANW) in its fourth-quarter 2022 investor letter:
“Within Information Technology, Palo Alto Networks, Inc. (NASDAQ:PANW) offers network security solutions to enterprises, services providers, and government entities. The company delivered another strong quarter with revenues, billings, and earnings all above the consensus. Management recognizes a challenging macro environment that is altering customer behavior such as increased deal scrutiny and elongating sales cycles. Their shares pulled back by -15% during the quarter.”
Palo Alto Networks, Inc. (NYSE:PANW), like Meta Platforms, Inc. (NASDAQ:META), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Tesla, Inc. (NASDAQ:TSLA), is a stock that is highly popular among hedge funds today.
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 91
Holding 13.9 million shares, Citadel Investment Group was the largest shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of the first quarter.
BofA analysts have a Neutral rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) shares as of May 31. They also raised their price target on the stock from $120 to $135.
Advanced Micro Devices, Inc. (NASDAQ:AMD) was seen in the 13F holdings of 91 hedge funds in the first quarter, with a total stake value of $4.9 billion
Advanced Micro Devices, Inc. (NASDAQ:AMD) is among the leaders in the S&P 500 technology sector as of this June, according to Cramer. The stock is up by 84.1% year-to-date as of June 3.
Horizon Kinetics LLC made the following comment about the company in its first-quarter 2023 investor letter:
“It is among what are considered to be the great technology companies, like Advanced Micro Devices, Inc. (NASDAQ:AMD) and Intel, that one is apt to see some of the greatest confusion between short-term financial results and share price movements, on the one hand, and long-term financial results. The former are exceedingly difficult to predict. Long term results are relatively easy to predict, because they are bound by the limiting realities of the business model. In the case of AMD, that is the business of being a large-scale semi-conductor manufacturer with a more dominant competitor that has a scale economy advantage.
Here’s what people see, remember and act upon. In the past several years, AMD has been the best performing major technology stock. It’s outperformed Apple, Amazon, Google, Meta (Facebook) and Nvidia…” (Click here to read the full text)
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Disclosure: None. 10 Stocks Jim Cramer Is Talking About Right Now is originally published on Insider Monkey.