We recently compiled a list of the 7 Stocks that Jim Cramer Recently Discussed. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against the other stocks that Jim Cramer has recently discussed.
Jim Cramer, host of Mad Money, recently addressed how investors can sometimes lose sight of the broader market perspective. He reminded his audience that the key to successful investing is simple: buy good stocks at reasonable prices and sell poor-performing stocks, even at a loss.
“Sometimes we forget what we are trying to do around here. We’re looking to find good stocks at good prices and buy them. We want to sell bad stocks at any price and kick them out of our portfolio.”
Cramer also touched on the current market environment, noting that we’re nearing the beginning of a rate-cutting cycle. While some may argue it’s not yet a cutting cycle, Cramer believes it is, regardless of whether it proceeds gradually. He pointed out that there’s another important factor to consider, an environment that is heavily oversold.
“We know that there are inflationary tariffs in the wind, but we don’t know their size, their breadth or their impact, but that’s why we’re already oversold. People saw this coming, they were worried and they took action ahead. They dumped stocks so they wouldn’t be long or own as much when the meeting (Fed meeting) occurred.”
READ ALSO: 6 Stocks Jim Cramer Talked About This Week and Jim Cramer’s Lightning Round: 7 Stocks to Watch.
As Cramer looked at the market, he expressed his focus on identifying high-quality stocks that have seen significant declines. He noted that, in a market that has already experienced substantial gains, the only place to find true value is among the laggards. Specifically, he pointed to the healthcare sector, where 62 healthcare stocks in the S&P 500 are currently down by an average of 19.7% from their peaks. Cramer acknowledged that some of this decline is tied to real risks within the sector, such as President-elect Trump’s focus on addressing middlemen in the drug industry, including pharmacy benefit managers and drug distributors. However, he believes much of the risk has already been priced into these stocks, making them potentially attractive investments at this point.
Cramer also drew attention to the medical device and technology sector, where stocks are on average down 17.6% from their highs.
“Now the goal is to build a position that starts somewhere well below where it was, simply because it has gone out of style in the current version of the Wall Street fashion show and is being hit with heavy end-of-the-year tax selling… You know why you do this? Because of the overarching principle behind good investing, buying low so that one day you can sell high, or maybe not sell at all.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 17. 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).
Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Discussing Advanced Micro Devices, Inc. (NASDAQ:AMD), Cramer said:
“… The other chip maker that’s been trading like a loser is AMD, another Charitable Trust holding. Now this is different. While AMD is clearly far, far behind Nvidia in making these ultra-fast GPUs, it was seen as, really the only chip maker that could even come close. But the fact that these hyperscalers are quite interested in custom silicon solutions from the likes of Broadcom and Marvell has investors wondering if these ancillary chips might actually be the next best option, not AMD and that’s a big reason why the stock’s down 12% since Marvell reported two weeks ago and it’s now down 45% from its highs in March. So that’s what’s happened. But what are we doing about it?… Even after it’s come down, I gotta trim something. It’s just not getting the kind of traction I thought it would with… AI chips. if we got Broadcom and Nvidia, we don’t need to keep sticking our necks out on AMD. This is a new theme. We just aren’t seeing the demand we thought we would for AMD’s AI chips and we haven’t seen a big move into AI PCs either, which they also have a big stake in.”
Advanced Micro Devices (NASDAQ:AMD) is a global semiconductor company that designs and supplies microprocessors, graphics processing units, chipsets, and embedded processors. During the earnings call for the third quarter, CEO Lisa Su addressed some of the ongoing challenges related to the supply chain. She emphasized that supply constraints have impacted the broader industry and acknowledged that the supply tightness is expected to persist in the coming quarters.
Additionally, in December, an executive from Amazon revealed that Amazon Web Services (AWS) was “not yet seeing” significant demand for the company’s MI300 lineup of AI GPUs. It should be noted that for the fourth quarter, the company updated its full-year GPU data center revenue forecast, increasing it from over $4.5 billion to more than $5 billion.
Looking ahead to 2025, Advanced Micro Devices (NASDAQ:AMD) remains positive about ongoing growth in the data center sector, fueled by significant investments from companies seeking to expand their infrastructure for AI workloads.
Overall, AMD ranks 3rd on our list of stocks that Jim Cramer has recently discussed. While we acknowledge the potential of AMD 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 AMD 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.
