In this piece, we’ll look at the stocks Jim Cramer talked about ahead of January’s biggest AI event.
In his appearance on Squawk on the Street the day CES took place in Las Vegas, Jim Cramer commented on the stock market division that persisted throughout 2024 and is present in 2025 as well. The division has seen technology stocks perform well, while other rate-sensitive sectors such as industrial and materials stocks have languished. Cramer commented on the reasons behind it: “I think that’s because people perceive that the rest of the market is hostage to rates. And that tech is not hostage to anything. So I’m aware of that and I’m just concerned that you have this speech tonight, nine-thirty Jensen Huang, everyone’s, we’re really kind of, whatever he says, is going to move things.”
In fact, this division is so prevalent that some of the biggest asset managers in the world have also been unable to remain immune to it. Mentioning a piece in the Financial Times, Cramer shared that it commented about “private equity and private equity trying to get into the 401(k) business.” He added and mentioned, “Marc Rowan CEO of Apollo says, I jokingly say sometimes we levered the entire retirement [inaudible] to NVIDIA’s performance! So [inaudible] we’ve got the NVIDIAs of the world which everybody likes and on the other hand, there’s these stocks are, they really are hostage to rates and no one wants them!”
However, even though technology stocks have stood the test of high interest rates, they might falter in some circumstances. One of these can be bond yields, and if the thirty-year yield spikes to 5%, then Cramer believes “that will start interfering with this tech rally that seems to be motivated by a lot of analysts coming out and saying this is the time, there’s now reacceleration in tech spend.”
The CNBC host also speculated on what Jensen Huang might end up talking about at CES later in the day. He stated “I think that one of the things that Jensen is going to talk about today are all the new use cases. This is tonight’s CES talk. It wouldn’t surprise me if we start hearing about robots. It wouldn’t surprise me if we didn’t hear a lot about Tesla. Tesla and self-driving cars. Tesla and the neural network that is based on NVIDIA!”
Along with industrial and material stocks, another sector that’s caught Cramer’s attention is banks. Mentioning a recent investment bank note about the sector he believes that “one of the groups that I think we have to focus on, there’s a really interesting, uh, Barclays piece on the banks. Darkest before dawn. Raising the group for the first time since 2019, emphasis here on Citi.”
Cramer also outlined that while technology valuations might appear to be overstretched, this isn’t the case with banks. He shared “This is a group that when you look at it, they’re selling at 11 times 2026 numbers. So the idea that you have this valuation problem in the market, well look at these stocks! There’s no valuation problem with materials. Or with banks.” He added “The valuation problem is with the stuff that keeps getting upgraded, which is enterprise software. So there’s a little duplicitous nature among the top people who work at these firms because they should be saying look, there are two markets. There’s the inexpensive market and we’re warming up to it, and the expensive market, and we don’t know what to do.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down all the stocks he mentioned during CNBC’s Squawk on the Street aired on Monday.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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).
29. Cerence Inc. (NASDAQ:CRNC)
Number of Hedge Fund Holders In Q3 2024: 10
Cerence Inc. (NASDAQ:CRNC) is a specialty software company that sells AI-based virtual assistants for the automotive industry. Its shares are up by 138% so far in January primarily due to the fact that the firm has secured a deal with AI heavyweight NVIDIA. Through this deal, Cerence Inc. (NASDAQ:CRNC)’s AI software will rely on NVIDIA’s hardware and software products to expand and build on AI capabilities. The firm is yet to turn a profit though, and Cramer commented quite a bit on the firm’s CEO Brian Krzanich:
“I’ve got Cerence. Now this is in honor of a tie up with, yes with NVIDIA. This is a company that’s run by Brian Krzanich, before that CDK and then of course the CEO of Intel. During a period where I still think Intel had some greatness.
“But I think the key thing about Cerence is that we have AI and there isn’t any limit to where it is. Hence AI is a multiple enhancer.
“I have Brian Krzanich on tonight. Now he’s Cerence, and of course that’s what we’re gonna talk about. Because of a deal with of course NVIDIA. But he knows the auto business. Cerence is auto, uh, AI, and I want to ask him what the hell happened. Because at the previous job he had was CDK software which was bought up by Brookfield in a leveraged buyout. This man knows about cars. He knows about semis. Something’s going on that makes it so cars are too expensive to repair. And it’s really hurting the working person.”
28. Paychex Inc. (NASDAQ:PAYX)
Number of Hedge Fund Holders In Q3 2024: 20
Paychex Inc. (NASDAQ:PAYX) is a software-as-a-service firm that caters to the human resource management needs of businesses. It allows customers to manage their payroll and other associated business processes. Paychex Inc. (NASDAQ:PAYX)’s shares are dependent on the state of the labor market, with more hiring and business expansion leading to more business for the firm. The stock is up by a modest 16.6% over the past twelve months since the broader labor market has struggled in the wake of high interest rates. Here is what Cramer said:
“Now, one of the things, it’s not a big deal, and it’s not a confirmed deal, but Paychex, a company that I have owned quite a bit, merging with Paycor perhaps. Now this is fifty billion with three billion, but what I wanna say is it doesn’t matter. The FTC fought Activision Blizzard merging with Microsoft. The FTC would have probably fought Paycor because it’s a rival of Paychex. This is the kind of deal that we are all going to have to get used to. Our colleague David Faber is going to have to chase down a lot of deals because there are a lot of deals that were never going to happen, that suddenly are on the grid. Why would Paychex want to alienate the FTC? Well this FTC would love this.”