Jim Cramer, host of Mad Money, recently discussed the impact of the previous President Joe Biden’s administration on the stock market and discussed the commonly raised question among business executives: Did the market perform because of the administration or despite it?
Cramer pointed to the Biden administration’s Inflation Reduction Act (IRA), which granted Medicare the authority to negotiate prices for certain expensive drugs. While this is expected to limit profits for major pharmaceutical companies, Cramer acknowledged that the high cost of drugs is a significant issue. However, he emphasized that Mad Money focuses on financial markets, not healthcare policy, and suggested that investors are looking for a government that takes a balanced approach to business. He added:
“Worse, at least if you’re a shareholder, you would’ve hoped that pharma and biotech CEOs actually sat down with the president for something, anything, just to explain why the drug companies don’t see themselves as the villains in our particularly expensive healthcare system but they didn’t talk to each other. Some of the CEOs believed the president just didn’t like the optics.”
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From an investor’s perspective, he suggested that the lack of communication left the pharmaceutical sector vulnerable, with drug stocks trading at low values due to the unpredictable nature of the administration’s stance.
Cramer also addressed the inconsistency in the Biden administration’s approach to the semiconductor industry. While he acknowledged the positive impact of the CHIPS and Science Act, which provided significant support for the sector, he criticized the unequal distribution of subsidies. Cramer specifically pointed to Intel, which received a large amount of funding, despite what he views as ongoing challenges within the company.
“The bottom line, if all that matters is who wins the next election, you could argue that this style didn’t work. That business might have been able to help bring down inflation, which is what I think undid the Democratic party in November. Business is not hated in this country. It doesn’t need to be loved, but something in between. Maybe everyone would’ve done better. Maybe that’s the put paid when it comes to business, the White House, and the closing stock prices of this administration.”
7 Stocks on Jim Cramer’s Radar
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on January 16. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in 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).
7 Stocks on Jim Cramer’s Radar
7. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 25
When a caller asked Cramer about MicroStrategy Incorporated (NASDAQ:MSTR), he remarked:
“Alright look, it’s a super, super hyped up version of Bitcoin. If you really love Bitcoin, be my guest. I happen to like Bitcoin. I’m not in love with it, so I don’t need to kind of double down which is what they offer. But look, by all means, if you love Bitcoin, you’re gonna really love that stuff.”
MicroStrategy (NASDAQ:MSTR) provides AI-driven enterprise analytics software and services, along with a range of consulting, support, and educational offerings. Cramer has maintained that instead of owning MSTR stock, he owns Bitcoin itself. In early January, he explained:
“As for the second-best performer, I honestly don’t know why this MicroStrategy is allowed to exist. I mean, really, here’s a company that’s making a leveraged bet on Bitcoin. That’s what it is, it’s an investment company. I think it should be regulated as one, not as a software company, but we’re in a world where nobody cares to hear about any crypto regulation whatsoever. Especially now that we’re about to have like a real crypto-friendly president and that’s how it advanced 359% last year and will probably go up again. Listen, I like Bitcoin. I own Bitcoin in part because I can’t own stocks. If you can own stocks and you believe in Bitcoin with all your heart and soul, then feel free to buy MicroStrategy. It’s Bitcoin on steroids but not that much more.”
6. Virtu Financial, Inc. (NASDAQ:VIRT)
Number of Hedge Fund Holders: 27
Cramer praised Virtu Financial, Inc. (NASDAQ:VIRT) and mentioned that the stock has been a “good buy” for a long time now.
“I think it’s a very inexpensive fintech company. They do a lot of execution, they have a lot of data. They’re a great market maker. They’re right over there and I think you should buy the stock. It has always been a good buy for as long as I can remember.”
Virtu Financial (NASDAQ:VIRT) is a financial services company that provides execution, liquidity, and analytics tools for trading across various asset classes, offering clients access to global markets and risk management solutions. Cramer has been a fan of the company for a long time now as is evident from the comment that he made in May 2021:
“I like it… Look, we know people from it. It’s a very good financial company. I think it should be selling at a higher price than it has. It has a very low price-to-earnings multiple. I’d be a buyer of it. I think you’re in good shape.”
Since the time he made the comment, the stock has been up around 30%.
5. Best Buy Co., Inc. (NYSE:BBY)
Number of Hedge Fund Holders: 37
Cramer noted Best Buy Co., Inc.’s (NYSE:BBY) stock decline and mentioned that he is not ready to give up on it.
“Well, you know what, I’ve got a, we have a meeting next week for the club and I feel very, very strongly that Best Buy is too cheap down here. It has been a one-way ticket to Hades from $103 all the way down here, yields 4.5%. I don’t want to give up on Best Buy… I don’t know why this stock can’t even lift for a single day though.”
Best Buy (NYSE:BBY) is a retailer offering a broad selection of technology products, such as computers, mobile devices, electronics, home appliances, entertainment products, and more. In November 2024, when BBY stock was at $89.54, Cramer said:
“Now we’ve seen a bunch of retailers’ reports not sweating numbers yet in many cases, their stocks still roared. Meanwhile, others like Target get clubbed like baby seals. It’s treacherous to start buying these now because many of these stocks have run mightily in the last few days… Is Best Buy still a category killer? We trimmed some of our position for the Charitable Trust this week after a big gain because we listened to tales of woe that we got from Home Depot and Lowe’s. This one is what I call too fraught. Then again, the shorts are on the ride and no one really expects much from Best Buy. So if it gives us anything good at all, then it’s to the moon…”
4. FTAI Aviation Ltd. (NASDAQ:FTAI)
Number of Hedge Fund Holders: 41
Discussing FTAI Aviation Ltd. (NASDAQ:FTAI) during the episode of Mad Money, Cramer said:
“Aircraft leasing’s a terrific business. I would hold onto that. It’s the opposite of, say the tanker business, which everybody wants to be in.”
FTAI Aviation (NASDAQ:FTAI) specializes in the ownership and acquisition of aviation and offshore energy assets to support worldwide transportation services. The stock has gained more than 90% over the past 12 months.
Tourlite Capital Management stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q3 2024 investor letter:
“FTAI Aviation Ltd. (NASDAQ:FTAI) continues to benefit from strong aerospace aftermarket tailwinds, with recent issues at Boeing presenting additional upside to both its short- and long-term business prospects.
As noted in our second quarter letter, FTAI’s Q2 results exceeded expectations, beating consensus estimates and prompting management to raise its guidance. Notably, FTAI increased its 2026 EBITDA target by 25%, from $1 billion to $1.25 billion. At the upper end of the newly raised Aerospace EBITDA guidance, FTAI has already achieved 46% of the $325-$350 million target, with this segment delivering approximately 30% quarter[1]over-quarter growth for the past four quarters.
While we believe strong financial performance will continue to support the stock price, we also see significant upside potential from narrowing the valuation gap between FTAI and its aerospace aftermarket peers. Despite the stock’s recent appreciation, we remain confident in FTAI’s outlook, with multiple catalysts expected to drive further growth through the remainder of the year.”
3. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 43
A caller asked if they should hold on to Palantir Technologies Inc. (NYSE:PLTR) stock or not and here’s what Cramer said in response:
“No, no. You hold it, you hold it and when it crops back down, you buy back the stock that you sold because this company is a winner. They have really smart people and a lot of good contracts. It’s the best data analysis company in the world, Palantir.”
Palantir (NYSE:PLTR) is a top provider of software solutions designed for intricate data integration and decision-making, catering to both government and intelligence agencies, as well as commercial clients. Previously, Cramer has called PLTR a “cult stock” but in early January, he noted:
“Most obvious winner for 2024, Palantir, the defense software company trying to revolutionize the way the Pentagon works. Its CEO Alex Karp is a brilliant bad boy Smash Mouth Philly guy who’s like a meaner version of Elon Musk and probably threw snowballs if not batteries at Santa Claus from the lower level of the link.
I think Palantir, up 340% for 2024, can have another breakout year because the Musk DOGE unit, Department of Government Efficiency, will work hand in glove with these guys. They’re all part of the same circle. They understand the procurement process. They will win a lot of business in 2025. Palantir, yes.”
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 76
Cramer called The Walt Disney Company (NYSE:DIS) “remarkable” and while he acknowledged the impact of the LA fires, he posited that the stock will not stay down for long.
“Disney, I turned to Jeff Marks today, it was at $106, I said, when should we buy back that stock that we sold much higher? I think you got a great price today. I think Disney is a remarkable company and people are selling it because of the fires in Los Angeles. I feel horrible about what’s happening in Los Angeles, but I do not think the franchise of Disney is gonna be down for long very much.”
Disney (NYSE:DIS) is a significant player in the global entertainment industry, with activities that include film and TV production, streaming services, and the operation of theme parks. Cramer has been recommending DIS for a while now and in 2024, he commented:
“It’s come down quite a bit. It sells at 18 times earnings. It’s down today because of I think the storms, but you know what? Disney is doing much better than people realize. And it’s about time, people started giving a little more respect. I’m a buyer of it. The analysts are dumping all over it. They’re dumping all over it now. I say buy more Disney.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Cramer mentioned Amazon.com, Inc. (NASDAQ:AMZN) during a recent episode. Here’s what Mad Money’s host had to say:
“Amazon, I’ll tell you, this is a multi-year move. We’re not to look at it on a quarter-to-quarter basis. I think it’ll be higher long term. I’ve been behind it now for 20 years. I’m not changing my view.”
Amazon.com, Inc. (NASDAQ:AMZN) has become a major force in the global tech industry, with its diverse portfolio spanning e-commerce, advertising, and subscription services. Over the last 20 years, AMZN stock has gained nearly 11,000%.
Tsai Capital stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) (AMZN—Year of First Purchase: 2017) Amazon was founded by Jeff Bezos in his garage in 1994 and today dominates the markets it serves. The company’s e-commerce business is gaining market share, despite its immense size, while its cloud services division, Amazon Web Services (AWS), is by far the leading cloud provider. We estimate that AWS now generates 60-65% of the company’s total operating profits.
Both Amazon retail and AWS benefit from numerous competitive advantages and deliver a high customer value proposition. Rather than leveraging its size to maximize short-term profits, the company follows a scale-economies-shared business model, sharing a generous portion of its margin with the consumer. This creates a flywheel effect that reinforces the company’s ecosystem.
Amazon’s approach of investing heavily in the business today to create shareholder value later masks the company’s underlying earnings power. As consumers continue to shift their spending from in-store purchases to online shopping, and as data continues to migrate from on-premise servers to the cloud, we expect Amazon to grow revenues at a low double-digit rate for at least the next five years and to significantly increase its operating margins.”
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
