On Tuesday, Jim Cramer, host of Mad Money, defended the growing wave of artificial intelligence investment, drawing a distinct line between this boom and previous capital expenditure surges. He argued that the AI movement stands apart from other booms driven by the private sector, largely because of the immense wealth backing it from Big Tech leaders. Cramer quipped:
“Bubble, bubble, bubble and you know how it just seeps into your consciousness? And that’s why I want to retire that word, instead talk about whether it’s a capital expenditure boom, one that might go bust. But it’s a boom. It’s not a bust.”
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Cramer highlighted that the economy has experienced many significant capital expenditure booms over time, noting that Deutsche Bank had recently published an impressive piece of research focused on these phenomena, examining both booms and busts.
The report from Deutsche Bank takes a look back at several major bubbles throughout history, including the explosive real estate market of the 20th century, as well as the dot-com and telecom booms, each of which culminated in significant losses. Yet, Cramer pointed out that not every capital expenditure boom ends in disaster. He cited various instances of successful themes that, despite their high risks, ultimately proved worthwhile. “These were fantastic themes, and no one ever called them bubbles,” he observed, adding that these movements, while capital-intensive, were largely initiated by government rather than the private sector. He added:
“This might be the boom that doesn’t go bust, because the players are so well capitalized. It simply doesn’t have to end that way…. But the bottom line: If you’re any of the hyper-competitive tech execs involved in the space race, you know what’s going on. You hate to lose and you won’t let it happen. After all, how do you think they got where they are in the first place?”
Our Methodology
For this article, we compiled a list of 6 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 25. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock 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).
Jim Cramer Discussed These 6 Stocks Recently
6. Delcath Systems, Inc. (NASDAQ:DCTH)
Number of Hedge Fund Holders: 27
Delcath Systems, Inc. (NASDAQ:DCTH) was mentioned during the episode, and here’s what Cramer said:
“Well, it’s a specialty pharma company. It is supposed to have its earnings breakout this year. And that’s why I’m going to bless it because remember I’m not recommending stocks that are losing money but are supposed to have an earnings breakout. But I would say, people who are looking at it… you’re not early to the story anymore. I’m glad that you… have been able to be, take, take advantage of the fact that this stock’s been such a win.”
Delcath Systems (NASDAQ:DCTH) develops targeted treatments for liver cancers, with its main product, HEPZATO KIT, delivering high-dose chemotherapy directly to the liver while reducing systemic side effects.
On March 4, the company reported its financial results for the full year 2024, highlighting total revenue of $37.2 million. Delcath Systems (NASDAQ:DCTH) posted a gross margin of 86% for the year. However, the company also reported an adjusted EBITDA loss of $2.5 million for the full year.
5. Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)
Number of Hedge Fund Holders: 35
When a caller asked what Cramer thought of Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX), he said:
“No, I think it’s very good and it’s had a very good year. It’s up more than almost every other drug, any company I follow. Yeah, we did like it. Now remember this [is] still [a] small cap stock and there’s some insider selling, but I do think it’s just a very good situation. We went over that a while ago and it beat the earnings estimates…. They were supposed to earn 55 cents and earned 70 cents. That’s my kind of stock. I think you’re in good shape.”
Catalyst Pharmaceuticals (NASDAQ:CPRX) develops and markets treatments for rare diseases, offering medications for conditions such as Lambert-Eaton myasthenic syndrome, focal onset seizures, pediatric LEMS, and Duchenne muscular dystrophy.