We recently published a list of Jim Cramer Focused On These 9 Stocks Recently. In this article, we are going to take a look at where Reddit, Inc. (NYSE:RDDT) stands against other stocks that Jim Cramer discussed recently.
Jim Cramer, host of Mad Money, expressed his frustration on March 19 about how investors often get caught up in discussions revolving around the Federal Reserve, interest rates, and the President’s trade policies, overlooking other important factors.
“Every now and then, we want to make money in the worst way, and when I say the worst way, I mean the dumbest way. We wind up talking endlessly about the Fed and interest rates or the President’s trade policy, whether it’s punitive tariffs, reciprocal tariffs. Oh man, come on.”
READ ALSO: Jim Cramer Talked About 7 Stocks & Stagflation Fears and Jim Cramer Recently Talked About These 12 Companies
On Wednesday, Cramer noted that investors reacted to the Fed’s open market committee meeting results with the same old rhetoric. The Fed announced, without any surprise, that it was leaving rates unchanged, and the market responded positively to the news.
Cramer clarified, however, that he recognizes the significance of the Federal Reserve in influencing market trends. He acknowledged that any negative remarks from Fed Chair Jerome Powell, like signaling that inflation is still out of control or that tariffs might lead to higher prices, pushing the Fed to raise interest rates, or eliminating the possibility of rate cuts, would indeed have a damaging effect. But, he emphasized, none of that came to pass on Wednesday.
“But there’s more to this market than the day-to-day action, which is why I want to focus on the bigger long-term themes for you.”
Cramer argued that, even with changes in interest rates, these long-term stories will be what really matters. Among these enduring trends, Cramer spotlighted artificial intelligence. He called the cooling off in AI investments in recent months “wrong”.
He maintained that AI is a multi-trillion-dollar force that will continue to drive market growth and innovation. Cramer pointed out that the U.S. is grappling with a significant labor shortage, and robots, capable of handling tedious, hazardous, and undesirable tasks, are here to stay. AI’s influence, according to Cramer, is unstoppable, unaffected by the Federal Reserve or even trade policies.
“It’s a multi-trillion dollar wave that can’t be stopped by the Fed or even the tariffs. Why? Because AI’s going to change the world and if you stand in its way, you’re nothing but a candle in the wind.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 10. We listed the stocks in ascending order of their hedge fund sentiment 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).
Reddit, Inc. (NYSE:RDDT)
Number of Hedge Fund Holders: 87
A caller asked what was going on with Reddit, Inc. (NYSE:RDDT) and Cramer explained:
“Okay, so there was a big short squeeze. Let me explain this. First of all, I think the company is doing incredibly well, okay? It didn’t do as well as what people felt because the stock had gone up so much, people were expecting something perfect. Second, there was a gigantic short squeeze. People were betting against it, betting it wouldn’t be a good quarter and it didn’t come out a perfect quarter. Third, I think that Steve Huffman’s doing a great job and I would start right here, right here. Let’s say you wanna buy a hundred shares, buy 25. That’s what we’re doing, by the way, guys, we’re not buying a hundred shares all at once. We’re buying 25, 25, 25. Okay, we’re buying down. That’s what you do. Leave room. Okay, leave room.”
Reddit (NYSE:RDDT) operates a popular platform that allows users to participate in discussions, share content, and interact with different communities centered around common interests. Cramer extensively commented on the company more recently i.e. on March 14 as he discussed:
“Just like with Cava, Reddit hasn’t done anything wrong. Last month, they reported a terrific quarter, revenue growth accelerated all the way to 71%. The problem here is that this is exactly the kind of stock that people dump whenever we get hit with the market-wide meltdown. It’s almost programmed. The only scenario in which I’d get more bearish on Reddit’s fundamentals would be if the current period of macro uncertainty turns into an outright recession because a recession would really hurt their advertising business.
In a recession, anything that depends on ads does get crushed but I don’t think we’re headed for a recession, which means Reddit’s pretty darn enticing now that the stock’s practically being cut in half.
… Plus, based on the way that Reddit’s been beating the estimates, I wouldn’t be surprised if the stock ultimately proves to be much cheaper than it looks right now. If only because the future of earnings are likely to come in higher than expected. Again, as long as there’s no recession, as long as this thing continues to be able to spread and grow, not just from this nation, I should say all over the world, Reddit’s a winner, and I think it is going to be very big internationally.”
Overall, RDDT ranks 4th on our list of stocks that Jim Cramer discussed recently. While we acknowledge the potential of RDDT 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 RDDT 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.
