We recently published a list of Jim Cramer Suggested Buying These 8 Stocks on Weakness. In this article, we are going to take a look at where Airbnb, Inc. (NASDAQ:ABNB) stands against other stocks that Jim Cramer suggested buying on weakness.
Jim Cramer, host of Mad Money, discussed the current state of business cycles last Wednesday, emphasizing how they were far from synchronized. He pointed out that different sectors were performing in contradictory ways, making it difficult for the Federal Reserve to determine its next move. While some industries are flourishing, others are struggling, and a few appear to be in serious decline.
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Cramer said that the chaotic landscape created a curious backdrop for the Nasdaq and the S&P 500, which continued to reach new highs, even as challenges persisted beneath the surface. Cramer noted that many of the stocks in these major indices were performing particularly well at the moment.
“And that’s why it feels so weird that the Nasdaq and the S&P 500 keep bumping up to new highs and yet so much bad is happening underneath. So many of the stocks in these indices are simply not that hot, including even some of the Mag seven. But that could change on a dime.”
Cramer also warned that the market could shift dramatically if the president takes action, a move he has been known to make frequently, for better or worse. According to Cramer, such actions could completely disrupt entire business cycles. Despite the overall market uncertainty, Cramer identified one clear winner: the travel and leisure sector.
“The most insanely positive cycle out there is travel and leisure. This one’s mostly a holdout from the days of COVID when we discovered that we were long on money and short on time. I think the best of the bunch are all worth buying into weakness. The airlines are breathtaking. I’ve never seen anything like it.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 19. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 54
Airbnb, Inc. (NASDAQ:ABNB) was mentioned during the episode, and here’s what Mad Money’s host had to say:
“When you travel, you need someplace to stay, don’t you? There are two stocks that are roaring in this cycle. Marriott and Airbnb, they just reported excellent numbers. These were cyclical stocks before Covid. Now they’re secular, meaning they seem to have growing, growth no matter what.”
Airbnb (NASDAQ:ABNB) runs a widely recognized platform that links hosts with guests, offering various types of accommodations and experiences. The marketplace is available via both online and mobile platforms. Oakmark Funds stated the following regarding the company in its Q4 2024 investor letter:
“Airbnb, Inc. (NASDAQ:ABNB) is an online marketplace to list, discover and book unique accommodations worldwide. The company benefits from a strong network effect between its guests and hosts. We believe there is a long growth runway as global travel is an attractive market, and alternative accommodations have been taking share. We anticipate Airbnb will drive further growth by creating more valuable services for both sides of its network, which includes the potential for paid placement, which has created significant economic value for comparable market places. In our view, management is aligned shareholders and well qualified to lead Airbnb as the company attempts to capture these growth opportunities. Short-term concerns about the macro travel environment and declining margins stemming from growth investments allowed us to purchase shares at a discount to our estimate of business value.”
Overall, ABNB ranks 3rd on our list of stocks that Jim Cramer suggested buying on weakness. While we acknowledge the potential of ABNB 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 ABNB 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 is originally published at Insider Monkey.