We recently published a list of Jim Cramer on 10 Stocks With The Biggest Declines Last Week. In this article, we are going to take a look at where Cadence Design Systems, Inc. (NASDAQ:CDNS) stands against other stocks with the biggest declines last week that Jim Cramer discussed.
On Monday, Jim Cramer, the host of Mad Money, analyzed the 10 largest stocks that suffered the most significant declines the previous week. He explained that examining the biggest losers can offer important insights into the current state of the market.
“Last Thursday and Friday were just brutal with the S&P plunging a combined 2.1%, Nasdaq [and] Dow both fell 2.7% as we got some soft economic data paired with some signs that the Fed, they weren’t that eager to make cuts.”
READ ALSO Jim Cramer Suggested Buying These 8 Stocks on Weakness and Jim Cramer Talked About These 12 Stocks Recently
Cramer emphasized that although the average decline was only 2-3% over the two-day selloff. However, focusing on individual stocks, the damage was much worse. He noted that growth stocks, which had been performing well, began to falter starting on Wednesday. Cramer then reviewed the largest pullbacks from the last three days of the week.
He explained that his analysis covered all components of the S&P 1500, specifically those with market capitalizations above $10 billion, ensuring a thorough and rigorous review. And when looking at these names collectively, Cramer noted that there is a lot to learn about the market dynamics. He went on to say:
“First for the hottest of the hot stocks without valuation support, they’re always vulnerable to sharp pullbacks usually it’s because of the bond market. Not this time.”
He added that when investors buy into momentum stocks, the gains can come quickly but just as easily disappear. Furthermore, he pointed out that many companies that were once considered solid performers are now reporting good earnings but offering disappointing guidance, which signals potential trouble ahead. He also noted that the less-than-truckload freight companies are suddenly out of favor, a sign of a weakening economy.
“Here’s the bottom line: At least in the eyes of Wall Street, the US economy’s looking quite a bit worse than it did just a month ago. Fortunately, it’s now a new week and even started off well with some decent gains for most stocks today, although there was a bit of collapse at the close. But we can always learn something from looking at the results of the tape and last week we got a real education from the momentum buyers trapped in the school of hard knocks.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 24. 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).
An office of software engineers and designers collaborating on a digital project.
Cadence Design Systems, Inc. (NASDAQ:CDNS)
Number of Hedge Fund Holders: 59
Cramer commented on Cadence Design Systems, Inc. (NASDAQ:CDNS) stock’s recent weakness and said:
“Finally, the eighth largest decline during the final three days of the last week was Cadence Design Systems. Wow, good company, software play that helps tech companies design semiconductors and electronics, including Nvidia. Cadence fell 14% during the three-day period. We were looking at it mostly on Wednesday after the current report, a solid quarter with conservative guidance. But the stock kept falling at the end of the week as more concerns about overbuilding for AI infrastructure emerged. Cadence is a, is fully a part of that theme.
So it continued to get hit, with the stock not, not far from the 52-week low now. It might actually be worth thinking about buying on weakness. Candidly, this weakness for Cadence could carry over to Nvidia when it reports on Wednesday. I’m just trying to keep you up on a stock that you may own.”
Cadence Design Systems (NASDAQ:CDNS) provides software, hardware, and services for integrated circuit design, specializing in functional verification and offering tools for digital IC design, synthesis, DFT, and physical implementation.
Overall, CDNS ranks 8th on our list of stocks with the biggest declines last week that Jim Cramer discussed. While we acknowledge the potential of CDNS 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 CDNS 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.
