We recently published an article titled, Jim Cramer on Netflix and Other Stocks. In this article, we are going to take a look at where Palantir Technologies Inc. (NYSE:PLTR) stands against other stocks discussed by Jim Cramer.
Recently, Mad Money’s host, Jim Cramer addressed what he called a “ridiculous plethora of sell-side downgrades,” noting that the Dow Jones Industrial Average fell by 0.94%, the S&P 500 decreased by 0.96%, and the Nasdaq Composite dropped by 1.18% on Monday. While he acknowledged the session’s poor performance, he cautioned that paying too much attention to downgrades can be detrimental for long-term investors.
Cramer urged investors not to get overly influenced by the negative sentiment on Wall Street and emphasized the importance of staying committed to strong companies, even when their stock prices experience volatility. He recounted the history of the bull market, stating:
“When I look at the history of this incredible bull market, and it has been an incredible bull market, it’s littered with buy-to-hold, hold-to-sell, buy-to-hold, hold-to-sell. These downgrades scare you out of amazing stocks at levels that may temporarily be too high, but will recover later. If you listen to the downgrades, though, you’ll never recover with it.”
In discussing the challenges investors face, Cramer pointed out that many get rattled by analyst downgrades and might sell their shares in solid companies, which can make it difficult to buy back in later.
“In the last decade, the toughest thing to do is to hold on to good stocks. But analysts and commentators love to take aim at big long-term winners. Their jeremiads have scared so many people out of some amazing gains.”
He observed that complacency can be prevalent on Wall Street, with bullish investors often overlooking risks while bearish ones miss out on potential opportunities. For those considering action based on a downgrade, Cramer advised waiting for a bounce to sell, but he noted that timing such moves is “incredibly hard,” even for seasoned traders.
Cramer emphasized that when analysts downgrade stocks that have already taken a hit and overlook positive aspects, it can create a challenging environment. However, he believes it is still possible to profit. Here’s what he said:
“I need you to understand that when analysts downgrade after stocks have already been hammered, when really good investors ignore the positives, then, it may be a grim time. But not so grim that we can’t make money by focusing on the fundamentals of the companies. And not just the economy, the Fed, interest rates and oil.”
Our Methodology
For this article, we compiled a list of 15 stocks that were mentioned by Jim Cramer during his episodes of Mad Money on October 7 and October 8. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
Cramer On Palantir Technologies Inc. (NYSE:PLTR): ‘Happens To Be A Good Company’
Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) specializes in developing and deploying advanced software platforms primarily for the intelligence community, focusing on counterterrorism investigations and operations. When Cramer was asked about the stock, he highlighted that it is owned and loved by individuals. He advised staying long and observing what comes next.
“Here’s the way I feel about Palantir. It’s a cold stock. Journalists called it that. I didn’t have to do that. But here’s what you know. This is owned by individuals. They love it, they walk it up every time it gets hit, they’re buyers. These things happen periodically. It happens to be a good company. I wouldn’t buy it up here, but the cold buyers can’t get enough and they take it higher seemingly every day. Stay long and see what happens.”
Over the past year, Palantir Technologies (NYSE:PLTR) has reported significant financial progress. In the second quarter, the company experienced a significant increase in its customer base, with a growth rate of 41%. Alongside this expansion, the average expenditure per customer rose by 14%, contributing to a revenue increase of 27%, which amounted to $678 million.
It marked the fourth consecutive quarter of accelerating revenue growth. Additionally, non-GAAP earnings per diluted share surged by 80%, reaching $0.09. The U.S. commercial segment has also shown remarkable performance, with revenue soaring by 55% year-over-year in the last quarter. The growth can be attributed in part to its boot camps, which are five-day sessions designed to educate potential customers on effectively utilizing artificial intelligence in critical operations. They have proven successful, as evidenced by an 83% increase in U.S. commercial customers during the second quarter.
In light of these positive developments, Palantir Technologies (NYSE:PLTR) management has revised its full-year guidance, now projecting a revenue increase of 23% for 2024, up from an earlier forecast of 21%. The adjustment reflects strong execution and performance surrounding the company’s Artificial Intelligence Platform (AIP), which has positively influenced its revenue trajectory.
Overall, PLTR ranks 13th on our list of stocks discussed by Jim Cramer. While we acknowledge the potential of PLTR 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 PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
