Jim Cramer, the host of Mad Money, recently shared important lessons from his four decades of experience in the world of investing in an episode on March 3. In a discussion about typical market pullbacks, he explained the various reasons why stock prices can decline.

“How about the garden variety pullbacks we experience all the time? What causes these declines? Well, there are usually a bunch of different varieties. First, you’ve got the sell-offs caused by the Federal Reserve.”

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Cramer said that the Fed is often the focal point of financial discussions, and for good reason. When the economy slows down, the Fed steps in with the goal of stimulating growth. However, Cramer noted that when the Fed tightens its policy, it is common for market predictions to become more dramatic, with some people warning of an impending market crash or severe downturn.

Yet, Cramer cautioned that investors should not panic when hearing such predictions. Fed rate hikes, while impactful, do not always lead to a market crash. In fact, he pointed out that there have been times when these hikes had minimal effect on stock prices. That being said, Cramer acknowledged that there are legitimate reasons for stock market declines when the Fed raises rates. One important factor is the competition for investor capital. He said that stocks are just one asset among many. He added:

“For instance, there’s gold. There’s real estate. Of course, the bonds. I like gold as a safe haven. I believe that every person should hold some gold… Real estate, actual real estate can be a good hedge, but most people don’t have the money to invest in that kind of real estate that big institutions can buy… Finally, we have bonds as an investment alternative and bonds are the source of the problem when the Fed tightens.”

Our Methodology

For this article, we compiled a list of 85 stocks that Cramer was bullish on that he shared during episodes of Mad Money aired in January 2025. We narrowed the list to 10 stocks that were the most favored by analysts. We listed the stocks in ascending order of their average analyst price target upside, as of March 4. We also mentioned the hedge fund sentiment around each stock, which was taken from Insider Monkey’s Q4 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).

Jim Cramer and Analysts Like These 10 Stocks

10. Twilio Inc. (NYSE:TWLO) 

Average Price Target Upside: 39.40%

Number of Hedge Fund Holders: 74

Cramer commented on Twilio Inc. (NYSE:TWLO) on January 24 when a caller asked if they should hold the stock long-term.

“Yes, I want you to. When I went over the quarter and then I searched through the website, I cannot believe how this company has really become one of the great assistants to small businesses trying to build their business. It’s a great customer relation management tool. I agree with you. I would own it and if it came down, I would buy more. That’s a strong endorsement. But that quarter was really incredibly good.”

Twilio (NYSE:TWLO) provides a customer engagement platform that delivers software and APIs for various communication services, such as messaging, voice, email, and marketing, as well as tools for creating personalized interactions and managing customer data.

9. PayPal Holdings, Inc. (NASDAQ:PYPL)

Average Price Target Upside: 40.04%

Number of Hedge Fund Holders: 94

When a caller mentioned that there is a certain lack of respect toward PayPal Holdings, Inc. (NASDAQ:PYPL), Cramer replied:

“Look, I tell you, this person does have respect for PayPal. They have a meeting in February that is gonna blow your socks off. I have to tell you that I think that this guy, Alex Chriss is the real deal. It’s at $89. Buy some now and if it does happen to come down before February, buy more then. I have total respect for PayPal and total respect for Alex. It’s a good stock and a good company.”

PayPal (NASDAQ:PYPL) is a technology platform that facilitates digital payments for both consumers and businesses. The stock has a consensus Buy rating with an average price target of $94.50, as of March 4. Moreover, on February 28, DZ Bank raised its rating on the stock from Hold to Buy, setting a price target of $92.