We recently published a list of Jim Cramer Recently Shed Light on These 9 Stocks. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against other stocks that Jim Cramer recently highlighted.
Jim Cramer, host of Mad Money, recently discussed a possible looming energy crisis in the U.S. that has taken many by surprise. He warned that if the country doesn’t act swiftly, it will soon be overwhelmed by an energy shortfall. According to Cramer, we need to tap into every available energy source including natural gas, wind, geothermal, and hydroelectric power. However, he stressed that the most critical energy source right now is nuclear power. He added:
“Crisis comes down to the fact that we had no real industrial growth in this country for decades so we haven’t had to build much energy infrastructure. Now all of a sudden these data centers start coming online like the ones that will be part of Stargate, the Oracle, SoftBank, OpenAI project… And these data centers consume insane amounts of electricity. It’s a level of demand that nobody saw coming. So after years where we spent more time decommissioning power plants and building new ones, we suddenly gotta go back into growth mode.”
READ ALSO: 8 Stocks on Jim Cramer’s Radar and Jim Cramer Discussed 9 Stocks for This Week’s Game Plan
Cramer went on to discuss an energy source that many are reluctant to consider: coal. While it may seem counterintuitive, he argued that coal could make a comeback in the U.S. energy mix.
“When the president gave his inaugural address on Monday, he declared a national emergency aiming to produce more domestic fossil fuels, including coal. Once the mainstay utility fuel, coal has been phased out year after year after year because it is terrible for the environment. 10 years ago, coal-based fuel was responsible [for] about 33% of electricity. Now it’s fallen to 15%.”
Yet, with the push to decommission nuclear plants, and the rising cost of natural gas, Cramer suggested that coal might need to be reintegrated into the energy mix. He argued that, despite the environmental drawbacks, the demand for power is now so great that coal’s long decline could be nearing its end.
“Under this president, coal could have… a renaissance. Sure, coal’s time has come and gone, but it will come again because the data center inspired energy crisis really is so pressing that there’s not really a choice anymore. Yes, the demand is that great, [and] we so foolishly mothballed good nuke plants that it wouldn’t surprise me if coal’s long decline may have finally run its course.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 22. 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).
A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.
AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 51
Cramer acknowledged that AppLovin Corporation (NASDAQ:APP) stock “does not quit” and has the tendency to go higher unless a competitor with lower pricing steps in.
“Oh man, I’m hate loving AppLovin. I cannot believe the stock goes up every day… This thing does not quit. It doesn’t know how to quit. And all I can tell you is unless someone else comes in directly and says, you know what, we do what they do and we charge half the price, this stock is gonna keep going up because it is a love stock. I’m gonna give you two for, I’m gonna say the same thing about Palantir. Palantir and AppLovin should go get married.”
AppLovin (NASDAQ:APP) is a company that offers software solutions designed to improve marketing and monetization strategies. Cramer recently expressed his belief that 2025 will be the year when venture capitalists begin backing alternatives to AppLovin. Because of this, he stated that he cannot recommend the stock at its current price, which is nearly 60 times this year’s projected earnings. However, he added:
“But try telling that to the true believers who set it up 713% last year, another 5.5% today, which frankly I find utterly ridiculous. I mean enough AppLovin already.”
Overall, APP ranks 2nd on our list of stocks that Jim Cramer recently highlighted. While we acknowledge the potential of APP 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 time frame. If you are looking for an AI stock that is more promising than APP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
