Jim Cramer opened Monday’s Mad Money episode with the observation that CEOs gathered at the NFL’s Super Bowl game weren’t just there for football. They were there to talk business, politics, and the economy. According to Cramer, their conversations revealed what’s truly shaping corporate America’s mindset right now, with the biggest one having to do with the current U.S. President:
“Nobody can figure out Donald Trump. These CEOs are baffled… They like that he’s attacking the federal bureaucracy, but they don’t understand why Elon Musk is wasting time on the small stuff.”
He also noticed that they appear more relaxed, confident and bullish under the new regime, compared to the previous one under Biden.
“There’s been a shocking amount of new business going on… CEOs no longer feel like the government is out to get them. Even Democratic donors can’t believe how disrespected they were by the Biden White House.”
He also pointed out that all CEOs think Wall Street valuations are stretched, although Cramer is still bullish.
“They almost all think the stock market’s too high, but their own stocks are too low. When I tell them the market’s actually undervalued and I like their stocks, they nod. But they think I’m a dreamer.”
Finally, of course, the big theme was around Trump’s tariffs and their impact on the markets.
“They all hate Trump’s tariff plans. These CEOs think they’re disorganized, don’t make sense, won’t raise money, and are terrible for business. They’re free traders at heart and totally baffled by Trump’s agenda.”
Our Methodology
For this article, we compiled a list of 15 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 18. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, 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).
15. NVIDIA Corp. (NASDAQ:NVDA)
Number of Hedge Fund Holders: 224
While talking about the conversations with the CEOs at the Super Bowl game, Cramer emphasized how all of them are still talking about Nvidia Corp. (NASDAQ:NVDA).
“They all want to know about Nvidia. They’re shocked at how Jensen Huang became king overnight, but I always tell them: He didn’t come out of nowhere. He’s been grinding for years, and now it’s paying off. They were shocked at how the media portrayed the Chinese as being well ahead of Nvidia, even though Meta, Amazon, Tesla, and Alphabet keep ordering billions and billions of dollars worth of Nvidia technology.”
Cramer also believes that big players in the market already know about the company’s Chinese competitor Deep Seek and they still regard Nvidia as one of the best American stocks.
“Do you think these Titans didn’t know about Deep Seek and they were buying Nvidia anyway? Give me a break. That was the only conclusion. […] They’re in awe of Jensen. They regard him as the classic American success story and they’re cheering for him. They always say, ‘Bought the stock.’ They see Nvidia as untouchable. The AI boom has made them indispensable, and despite all the noise about competition, the big players keep buying.”
14. Salesforce Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 164
Discussing Salesforce Inc. (NYSE:CRM), Cramer responded to a caller concerned about a 10% loss:
“Look, Mark’s done a great job. This happens. We own Salesforce—we started buying it when it was at eight bucks. It’s had a big run. I don’t blame you for feeling the pain, but I think it’s worth buying more and getting a better average. Why? Because I believe the company’s going to have a blowout quarter.”
Salesforce (NYSE:CRM) is a global leader in customer relationship management (CRM) software, providing businesses with cloud-based solutions to manage sales, service, marketing, and analytics. The company has been expanding its AI-driven platform, Salesforce Einstein, which helps businesses automate workflows and gain deeper insights into customer data.
Despite the recent stock pullback, Cramer remains bullish, emphasizing that Salesforce’s long-term growth potential remains intact, particularly with its focus on operational efficiency and AI integration. He believes that the current dip offers a buying opportunity for investors willing to average down.
13. Affirm Holdings (NASDAQ:AFRM)
Number of Hedge Fund Holders: 62
While taking credit for this amazing stock pick from an earlier episode of the show, Jim Cramer highlighted the impressive performance of Affirm Holdings (NASDAQ:AFRM):
“You know what I like about Affirm? It’s smart lending. They offered that convertible note deal, bought back stock, and crushed the shorts. It’s had a remarkable run, up 168% in six months. And I don’t think it’s done yet. It hit a high today, might back off a little, but Max Levchin’s got it going. He’s a great lender.”
Affirm Holdings (NASDAQ:AFRM) is a fintech company specializing in “buy now, pay later” (BNPL) solutions, allowing consumers to make purchases and pay in installments without hidden fees. The company has expanded its partnerships with major retailers, including Amazon and Walmart, while continuing to grow its user base.
Cramer remains optimistic about Affirm’s trajectory, attributing its success to strong leadership under CEO Max Levchin and innovative financial products. While he acknowledges the potential for short-term pullbacks, Cramer believes Affirm still has room to run, making it a stock to watch closely.
12. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 58
Discussing KLA Corporation (NASDAQ:KLAC), Cramer highlighted the company’s critical role in the semiconductor industry:
“Regular viewers know I’m a huge believer in the AI revolution, and aside from Nvidia, there are winners that stay out of the headlines. KLA is one of them. It’s the brains behind a lot of what you hear when you talk about semiconductor companies.”
KLA Corporation (NASDAQ:KLAC) provides process control and yield management solutions for semiconductor manufacturing. Their advanced inspection and metrology systems are essential for chipmakers aiming to expand production, especially for high-end AI-driven chips.
Cramer emphasized how KLA bounced back after the recent “Deep Seek” scare, which temporarily drove the stock down:
“This company reported an impressive set of results at the end of January, and upbeat guidance for the current quarter has helped the stock recover after it got hammered by the Deep Seek scare. But those numbers were incredibly misleading, and I think this could be a great buying opportunity.”
Cramer also pointed out KLA’s resilience during a period of heightened geopolitical tensions and export controls:
“People think we don’t make anything in this country, but KLA proves them wrong. They make the most sophisticated equipment in the world and export 88% of their products. This is where the real intellectual property resides—this is what we do best in America.”
With strong fundamentals, continuous innovation, and a dominant position in semiconductor manufacturing, Cramer views KLA as a stock worth holding for the long term. As he put it:
“We want this to be the stock you put away in the drawer. No drama, just steady growth.”
11. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 111
The Walt Disney Company (NYSE:DIS) is another company that Jim Cramer loves and during the episode, the host expressed his disbelief over the market’s reaction to its latest earnings report and praised the company’s latest numbers:
“Disney reported what I thought was a fantastic quarter on February 5th, yet the stock sold off nearly 2.5% the same day. I figured investors would snap this one up. Buy the dip! But here we are, two weeks later, and the stock still hasn’t recovered. It’s crazy. […] Just look at the turnaround in their direct-to-consumer business, mostly Disney+. It used to be a money pit, constantly burning cash. But last quarter, it generated $293 million in operating income, way ahead of what Wall Street was expecting. That’s profitable growth, and it counts.”
Ultimately, Jim Cramer sees Disney’s recent pullback as a clear buying opportunity:
“I’m sticking with my guns. That this was an excellent quarter for Disney and the weakness in the stock since the quarter is indeed a clear buying opportunity, especially if you don’t already have a position in this one.”
10. Netflix Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 145
When asked about Netflix Inc (NASDAQ:NFLX), Cramer responded to a caller wondering if the recent dip presented a buying opportunity:
“Let me give you the Netflix story, skinny, very quickly. Every momentum stock came down today. This was an attack on momentum and a shift back into classic growth stocks. And you know what? It’s an opportunity to buy Netflix. I do like that company very much.”
Netflix remains the leader in the streaming industry, with over 260 million global subscribers and an unrivaled content library that consistently drives user engagement. Its recent crackdown on password sharing has boosted subscriber growth while increasing average revenue per user (ARPU).
Cramer emphasized Netflix’s unique position in the streaming market:
“You know from the club that Disney’s cheap, but Netflix is sui generis. There’s nothing else like it. It stands alone.”
9. Jabil Inc. (NYSE:JBL)
Number of Hedge Fund Holders: 55
Discussing Jabil Inc. (NYSE:JBL), Cramer talked about the company’s impressive performance and its ability to thrive despite market volatility and how it has been able to adapt throughout changing markets:
“What in the world has gotten into the stock of Jabil? This company has been on fire ever since it reported a tremendous quarter back in December. It’s up more than 25% in the past two months, setting foot into fresh all-time high territory. I’ve always loved this company. […] “They’re not just a manufacturing company, they’re an engineering and supply chain powerhouse. They build semiconductor fab equipment, testing equipment, silicon photonics, servers, and racks. Amazon just did a deal with them, cementing a hugely important relationship.”
Jabil is a global manufacturing solutions provider that offers design, engineering, and supply chain services across various industries, including electronics, healthcare, automotive, and consumer goods.
Cramer emphasized Jabil’s resilience despite concerns about tariffs and expressed his overall enthusiasm about the stock:
“Jabil’s a global operator, and now that the U.S. is getting more aggressive with tariffs, people wonder if they can keep thriving. I think they can. They operate in 30 countries and know how to move manufacturing around efficiently. You’ve got to look at this company. Jabil knows how to navigate volatility and turn challenges into opportunities. It’s a name worth holding.”
8. Dutch Bros Inc. (NYSE:BROS)
Number of Hedge Fund Holders: 41
When asked whether it was time to take profits on Dutch Bros (NYSE:BROS), Cramer didn’t hesitate to share his stance:
“There’s never anything wrong with taking a little profit, but absolutely not. This stock has been a rocket, up 63% for the year. You know how I’ve felt about Dutch Bros for a long time. I was on this one before anyone else because my daughter CeCe told me, ‘There’s nothing like it.’ She was right, and I still like the company very much.”
Dutch Bros is a drive-thru coffee chain known for its unique drinks like the “Annihilator” and strong brand loyalty. The company continues to expand rapidly across the United States while maintaining impressive sales growth.
Cramer’s sentiment remains bullish despite the stock’s strong run, suggesting that while trimming profits is fine, holding Dutch Bros long-term could still be rewarding.
7. Archer Aviation Inc. (NYSE:ACHR)
Number of Hedge Fund Holders: 36
When a caller asked about adding Archer Aviation (NYSE:ACHR) to his son’s stock portfolio, Cramer gave a cautious but optimistic green light:
“Here’s the deal, because you said it’s for your son, I’m going to okay it. Why? Because strange things happen. A lot of people think Archer’s a little out there, like it’s ‘Lost in Space.’ But they just received FAA certification for a Public Training Academy. Maybe this thing is for real. If it’s for your boy, fine. He’s got his whole life ahead of him. Don’t put your money in, put his.”
Archer Aviation focuses on electric vertical takeoff and landing (eVTOL) aircraft, aiming to revolutionize urban air mobility. The FAA certification is a big milestone in its path toward commercial operations.
While Cramer’s endorsement was reserved, he acknowledged Archer’s progress, suggesting it might be worth the risk for younger investors with time on their side.
6. Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 340
Addressing concerns about Amazon.com Inc (NASDAQ:AMZN) and its recent stock struggles, Cramer reaffirmed his confidence in the tech giant:
“Amazon is what I call ‘money side up.’ This stock can go down, and when it does, what do you do? You buy it. That’s what I’m telling club members. I regard this stock going down as a gift, you wouldn’t be able to get it otherwise. This thing is amazing. Think about it: people are ordering from Amazon while selling the stock. That makes no sense to me.”
Recurve Capital stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) – 5.1% of assets as of 12/31/2024
Amazon has been an agent of disruption for a long time in retail, cloud computing, and beyond. Its consumer business is incomparable for small parcel, general merchandise. Prime delivery windows keep shrinking, which keeps pulling more market share Amazon’s way. It has an amazing transportation, fulfillment, and logistics network capable of service levels that were unthinkable at current prices just a couple decades ago. Additionally, AWS is a leader in cloud verticalization, powered by proprietary semiconductors, hardware, software, facilities, and more. Amazon’s customer-centricity is the driving force behind its continuous innovation and disruption. As the juggernaut disruptor, it is likely the world’s best company at solving really hard problems for customers at massive scale.
Amazon does not trade at a mid-single multiple of medium-term FCF/share or EPS. Our cost basis was less than 10x our estimate of 2028 FCF. However, few companies reinvest at the rate Amazon does and, theoretically, it could double the free cash flow I model simply by moderating its reinvestments for a year or two – but that may not be a great outcome for long-term investors. This is why it is important to evaluate companies based on owner’s earnings, not reported earnings. For instance, a private owner of Amazon might shut down Project Kuiper and Alexa and massively increase EPS and FCF/share.”
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 412
Cramer didn’t mince words when asked about Alphabet’s (NASDAQ:GOOG) $75 billion capital expenditure and competitive positioning:
“People in my club know I’ve been selling it down, selling it down, and selling it down. Would it be the first one I leave from the Magnificent Seven? Yeah, probably. It still sells for only 20 times earnings, but they really need to rethink their game plan. Gemini is competing with Google Search, the ads are endless, and they don’t know how to monitor YouTube. If they’d put me in charge, I’d clean that thing up and get it to $250, then see you later.”
Alphabet, the parent company of Google, remains a dominant force in digital advertising and AI, but Cramer’s frustration highlights concerns about its current strategic focus and operational efficiency.
While he acknowledged Alphabet’s valuation as reasonable, Cramer’s tone suggested he’s no longer as bullish on the stock compared to other tech giants.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
4. Red Cat Holdings Inc. (NASDAQ:RCAT)
Number of Hedge Fund Holders: 9
While discussing future-focused stocks, Cramer had a clear take on Red Cat Holdings (NASDAQ:RCAT):
“This one just happens to be a personal favorite of our chief scientist, Ben Stoto. We talk about Red Cat a lot. It’s a data analytics company, and you know what? I’m going to tell you, you can buy it. You really can. Because if it doubled, you’d feel like an idiot for not buying Red Cat.”
Red Cat provides advanced analytics solutions for drone technology and other data-driven applications. Its partnerships and product innovation continue to attract attention.
Cramer’s endorsement, though partly anecdotal, reflects a belief that Red Cat’s potential upside outweighs the risks at its current valuation.
3. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 95
While discussing standout IPOs, Cramer highlighted AppLovin (NASDAQ:APP) as a prime example of a company that defies traditional valuation metrics:
“Let’s start with a company almost nobody’s heard of: AppLovin. It came public in 2021, and now it’s an $18 billion company helping mobile video game developers with in-game advertising. That’s how most of these games make money. […] The stock’s up because they’ve got stunning growth, hard to believe. But here’s the problem: it still sells for over 75 times this year’s earnings. How do you value that kind of growth? Honestly, I have no idea. It’s whatever the market will bear, and I can’t invest like that.”
AppLovin provides software solutions that enable app developers to maximize revenue through targeted advertising and user acquisition. Its recent quarterly report blew past expectations, with earnings of $1.73 per share, far above the expected $1.26 and nearly quadrupling the $0.49 EPS from the previous year.
Despite its impressive growth, Cramer believes this is a very speculative stock, comparing investing in AppLovin to gambling:
“This one feels like you’ve got a nine and a face card in blackjack, you hit, and you pull a two. It’s that uncertain.”
2. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 63
Turning to Palantir Technologies (NYSE:PLTR), Cramer noted how the stock has become a retail investor favorite, seemingly disconnected from fundamentals:
“Palantir is now a $292 billion market cap. It sounds preposterous when you realize the stock’s selling at 235 times earnings. It’s absurdly expensive, but here’s the catch: the numbers are extremely great.”
Palantir specializes in data analytics for government and commercial sectors, with its platforms used for defense, healthcare, and financial services. Cramer pointed out how CEO Alex Karp’s media presence continues to fuel the stock’s momentum, but also warned against chasing the stock purely on hype:
“Alex Karp was on Squawk Box this morning promoting his new book. Second time on our network and, like clockwork, the stock jumped another five bucks to hit an all-time high. It’s almost automatic. […] People are valuing Palantir like they valued GameStop at its peak. The difference? Unlike GameStop, Palantir has a brain and a real growth story. But the valuation? That’s the problem.”
Baron Asset Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”
1. Reddit Inc. (NYSE:RDDT)
Number of Hedge Fund Holders: 87
Cramer also addressed Reddit’s (NYSE:RDDT) recent pullback, following a disappointing quarterly report and a drop in active users due to a change in Google’s algorithm that triggered the selloff.
“Reddit was a red-hot IPO, running to $230 last week before getting clobbered by a quarterly miss. What caused it? A change in the Google search algorithm. No hot stock can afford to have that happen. […] I’ve been there. When I ran TheStreet, Google changed its algorithm multiple times without warning, and we’d miss a quarter by a mile. It happens. That’s why I think you should take advantage of this pullback and do some buying.”
Cramer sees Reddit’s potential as a takeover target for major AI players:
“This company’s a content goldmine. It could be gobbled up by Meta, Grok, or ChatGPT. That’s why the stock will keep going and going, retail investors love it, and that love keeps driving it higher after every single dip.”
While we acknowledge the potential of Reddit Inc. (NYSE: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 timeframe. 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.
Disclosure: None. This article was originally published on Insider Monkey.
