Jim Cramer, host of Mad Money, recently shared his thoughts on the market’s movements this week, focusing on the economic data that’s shaping the outlook. He highlighted the upcoming nonfarm payroll report on Friday, noting its potential to sway market sentiment. Cramer pointed out that the market has been shaken by the persistently high 10-year treasury bond yields, which refuse to drop.
“Friday’s employment numbers need to show lower wage growth and disappointing hiring. Now that could bring down the yield in the 10-year and therefore make people feel that the Fed will be back on schedule to start cutting the rates again. We gotta get them back into that groove, you know. On the other hand, if hiring and wages remain hot, well then anything good that happens next week could be repealed.”
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The labor report is especially critical, according to Cramer, because despite the strength in sectors like autos, housing, and materials, the overall economy may still be running too hot for the Fed to slow it down as needed. He turned his attention to other economic indicators, such as the Purchasing Managers’ Index (PMI), which is offering strong signals of economic activity. Cramer mentioned a recent report, including Monday’s release of the PMI composite index, as an important barometer for the economy.
This data, he explained, provides valuable insights into how the economy is performing across different sectors, with particular attention to manufacturing, which has shown particularly strong performance. In addition to these key reports, Cramer also mentioned the implications of the Job Openings and Labor Turnover Survey (JOLTS), specifically focusing on job openings.
“I’ve been mulling over these job openings numbers and I keep thinking about how President-elect Trump might reverse the high levels of immigration we’ve seen under the Biden administration.”
Cramer warned that mass deportations could create a labor shortage that would drive wages even higher, especially if the country cannot rely on enough workers to fill the gaps. In that case, Cramer mused, “robots may be our only hope,” alluding to the role of automation in addressing potential labor shortages.
“So here’s the bottom line: It’s a light week, but still impactful, accept that people will be on edge ahead of Friday’s employment report. Still, I think you should do some buying if the market gets hammered. As we saw today, it’s not nearly as bad out there as so many think.”
Jim Cramer Discussed These 7 Stocks
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For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 3. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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Jim Cramer Discussed These 7 Stocks
7. ServiceTitan, Inc. (NASDAQ:TTAN)
Number of Hedge Fund Holders: N/A
Ahead of ServiceTitan, Inc.’s (NASDAQ:TTAN) third-quarter fiscal 2025 earnings release, Cramer said:
“There’s not a lot of corporate news of any consequence, but a recently minted IPO ServiceTitan, which is [a] software as a service company to help tradespeople, is going to report and I think it’s gonna give us a great quarter, maybe one that is so good that it’ll worth be buying ahead of.”
ServiceTitan (NASDAQ:TTAN) is a provider of cloud-based software designed to assist businesses with a variety of tasks including advertising, scheduling jobs, dispatching, invoicing, and processing payments. In December, the company announced the pricing of its initial public offering (IPO).
From fiscal 2021 to fiscal 2024, the company’s revenue grew from $179.2 million to $614.3 million, marking a compound annual growth rate of 51%. Despite this significant revenue growth, the company reported net losses of $269.5 million in fiscal 2023 and $195.1 million in fiscal 2024. The markets the company serves represent roughly $650 billion of the total $1.5 trillion annual industry spend. The company captures, on average, approximately 1% of its customers’ Gross Transaction Volume (GTV) as revenue from the usage of its software products.
ServiceTitan (NASDAQ:TTAN) estimates that by offering its full suite of products, it has the potential to capture around 2% of its customers’ GTV as revenue. With its current product offering and serviceable industry spend, the company estimates that its total addressable market opportunity is approximately $13 billion.
6. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 33
While Cramer commended Walgreens Boots Alliance, Inc.’s (NASDAQ:WBA) CEO, he mentioned that it is difficult to bet on the stock.
“Finally, there’s Walgreens Boots Alliance. That’s the ailing drugstore chain. It needs to do something, anything to reverse its forces. And now I believe, and I have tremendous faith in CEO, Tim Wentworth. I don’t think he’s sitting idly. I think he’s working on a change and he might even have buyers lined up for some parts of the company and maybe not all. I would not bet against this man, but it’s still pretty hard to bet on Walgreens.”
Walgreens (NASDAQ:WBA) is a prominent name in the retail pharmacy sector, with a diverse range of brands under its umbrella, including Walgreens, Boots, Duane Reade, No7 Beauty Company, and Benavides in Mexico. However, the company has faced significant financial challenges, with its stock losing more than 80% of its value over the past five years.
The company is facing increased competition from tech-driven retailers like Walmart and Amazon in the pharmacy sector. The company reported a $526 million operating loss in the fourth quarter, largely due to a $332 million impairment charge. The company is undergoing a turnaround, considering asset sales and cost-cutting measures. As part of a turnaround, it plans to close 1,200 underperforming stores, focusing resources on its more profitable locations.
CEO Tim Wentworth highlighted that, despite challenges, around 6,000 of its 8,000 stores remain profitable. Additionally, Walgreens (NASDAQ:WBA) made a significant move in early 2024 by cutting its dividend yield by 48%, with a focus on prioritizing capital allocation. In early December 2024, The Wall Street Journal reported that the company is in talks with private equity firm Sycamore Partners regarding a potential go-private deal, which could be completed in early 2025. However, neither Walgreens nor Sycamore has officially commented on these discussions.
5. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Holders: 36
While Cramer acknowledged that sentiment around alcohol and companies like Constellation Brands, Inc. (NYSE:STZ) is a little negative due to health concerns and more, he mentioned that the stock is worth investing in.
“It’s a bedraggled liquor stock we own for my Charitable Trust that’s been up and down and up and now mostly down. It’s a bit of a jobe stock. Right now, alcohol is under siege by everyone from the Surgeon General this morning for link to cancer to the GLP-1 drugs, which blunt the craving to the, in the case of Constellation, potential tariffs on its Mexican beers, Modelo and Corona, plus an endangered population of drinkers of some significance, the Hispanic immigration cohort that could be hassled or deported by the authorities under Trump.”
Cramer acknowledged the challenges for the company, however, he believes the company is still a solid investment due to its strong cash flow and growth potential. Cramer also speculated that the president-elect might exempt imported beer from tariffs, which could help Constellation. Having recently bought shares for the Charitable Trust, he explained that sometimes enduring tough times is necessary to make a profit.
Cramer said that he expects the company to announce the completion of its Mexican brewery and the end of construction costs, which could lead to a bigger stock buyback.
“On the conference call, we wanna hear that this gigantic brewery that they’re building in Mexico is almost ready and the costs for building it are behind them. That could lead to a voracious buyback much bigger than [the] one they currently have. I know it’s a dicey one and I don’t feel good about it, but what can I tell you? Sometimes you just don’t feel good before you make money.”
Constellation (NYSE:STZ) is a leading producer, importer, marketer, and seller of beer, wine, and spirits, offering beer primarily under a variety of brands. At the end of fiscal 2024, the company’s existing facilities in Mexico had a production capacity of approximately 48 million hectoliters. It plans to allocate approximately $3 billion in capital expenditures from fiscal 2025 through fiscal 2028 to continue expanding its operations.
The company raised the lower end of its full-year comparable EPS outlook, which now stands at a range of $13.60 to $13.80. It expects enterprise net sales to grow between 4% and 6% for fiscal 2025, with enterprise comparable operating income anticipated to increase by 8% to 9%. However, in its wine and spirits business, the company forecasts declines in both net sales and operating income for the full fiscal year.
Constellation (NYSE:STZ) expects a 4% to 6% drop in net sales and a 16% to 18% decrease in operating income due to ongoing operating deleverage and top-line challenges. For fiscal 2025, the company also expects free cash flow to range between $1.4 billion and $1.5 billion, marking the high point of capital expenditures in its beer business medium-term outlook.
4. Jefferies Financial Group Inc. (NYSE:JEF)
Number of Hedge Fund Holders: 43
Cramer called Jefferies Financial Group Inc. (NYSE:JEF) a “winner” and mentioned that changes in the FTC can prove to be beneficial for the company.
“Then after the close we hear from an outfit that you may not know, but I follow pretty close. It’s called Jefferies Financial Group. This stock’s been a total winner. Get this, it ran from $39 and change this time last year to $81 today. That is stellar.
I think the change at the FTC where the chief who’s ideologically opposed to big business is about to be replaced by someone with a more traditional approach will mean many, many, many, many, many more takeovers and that means very big earnings per share for Jefferies, which consults on these deals, I wanna hear about their outlook for 2025.”
Jefferies (NYSE:JEF) is an investment banking and capital markets firm offering a wide range of services while also managing diverse alternative asset management platforms across various investment strategies and asset classes. The company reported its fourth-quarter 2024 earnings on January 8, which showed mixed results. It generated $1.96 billion in revenue, surpassing analysts’ expectations.
However, its diluted EPS came in slightly below predictions at $0.93. Despite this, the company posted a profit of $205.7 million for the quarter, more than tripling the $65.6 million earned during the same quarter the previous year. In its annual shareholder letter, the company highlighted a strengthened M&A pipeline with a higher probability of successful deals, an expanding IPO backlog, increased capital demand from both companies and private equity sponsors and higher trading volumes as the firm entered the new year.
In 2024, Jefferies (NYSE:JEF) played a key role in advising on several high-profile transactions, including the $26 billion merger between Diamondback Energy and Endeavour Energy, the $18 billion sale of SRS Distribution to The Home Depot, and the $5 billion sale of Darktrace.
3. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 57
Delta Air Lines, Inc. (NYSE:DAL) is set to report its Q4 and full-year 2024 earnings on January 10. Mentioning the company, Cramer commented:
“Delta reports too. I think it’ll be stellar. The airlines are a changed breed. They’re no longer building up capacity to meet… demand. Instead, they’re doing their best to keep capacity tight and prevent a ruinous price war. It’s still the right time to own Delta because the air traffic remains robust and profits are flowing like never before.”
Delta (NYSE:DAL), a prominent provider of air transportation services, offers both passenger and cargo services across a wide network of domestic and international routes. During its Investor Day, the company projected strong sales growth for 2025, anticipating increased revenue driven by a strong economy and ongoing demand for premium and international travel. Delta President Glenn Hauenstein highlighted improvements in capacity management, noting that excess capacity observed in the summer months improved by August, helping to boost revenue as the airline entered the fall season.
Over the next three to five years, Delta (NYSE:DAL) is targeting mid-teens operating margins, 10% earnings per share growth, and free cash flow in the range of $3 billion to $5 billion. Looking ahead to 2025, the airline expects capacity growth of 3% to 4%, along with revenue growth in the mid-single digits and non-fuel unit cost growth in the low single digits.
2. Albertsons Companies, Inc. (NYSE:ACI)
Number of Hedge Fund Holders: 58
Discussing Albertsons Companies, Inc. (NYSE:ACI), Cramer said:
“This gigantic grocery store chain was trying to merge with Kroger to create a powerhouse just so it could compete actually with Amazon, Costco, and Walmart but the deal was blocked and I think that might’ve really hurt Albertsons. In the interim, I wanna hear if there’s still a lot of food inflation to come. I also wanna know if they’ve seen any decline in the consumption of salty snacks and cookies and candy alongside the rise of the GLP-1 drugs.
Cornell Business School just put out this really amazing study. It shows a meaningful decline in the consumption of these categories, which is exactly what you’d expect… But anything that reduces consumption by double digits in some categories is gonna actually hurt Albertsons’ profitability, along with that of the processed food companies.”
Albertsons (NYSE:ACI) operates food and drug stores offering groceries, health and beauty products, pharmacy services, fuel, and more, while also manufacturing and processing food products for sale. The company operates under various store banners. The company recently reported its third-quarter earnings, posting a net income of $401 million, or $0.69 per share. Loyalty membership saw a significant increase, rising by 15% to reach 44.3 million members.
Management stated that the strategies put in place to address customers’ demand for value amid inflation are proving effective. CEO Vivek Sankaran mentioned that over the next three years, the company aims to generate $1.5 billion in savings. This will be invested into improving the customer value proposition and growth initiatives, while also helping to navigate the challenges posed by inflation.
Sankaran also highlighted that financial pressures on consumers remain significant, prompting Albertsons (NYSE:ACI) to explore further price reductions on select products. The company is closely monitoring the impact of GLP-1 weight-loss drugs on consumer behavior. He noted the significant reduction in calorie intake facilitated by these drugs and explained that if 10% of customers were to reduce their consumption by 10%, it could possibly result in a 100 basis point decline in food volume.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
During the episode, Cramer mentioned NVIDIA Corporation’s (NASDAQ:NVDA) Jensen’s speech on Monday and said:
“Tech was strong all day today, you know, it’s the leader again in part thanks to the buzz around Nvidia, CEO Jensen Huang’s speech at CES on Monday night, Vegas. Right now, as I’ve stressed… I think we could be dazzled by the use cases for Nvidia’s latest chips, especially the video component. Any company that buys the platform of GPUs and software can make a fortune from it. That’s important because we keep hearing that Amazon wants to compete head-to-head with Nvidia. Something, by the way, I don’t even believe.
Customers want cheaper chips. Amazon’s trying to make them. That said, if Jensen can give his customers a four times return on investment, that’s what he’s gonna talk about and show us on Monday night: actual cases of how that can be accomplished. I doubt Amazon or anyone else could compete with that and maybe Nvidia actually goes to a new all-time high.”
NVIDIA (NASDAQ:NVDA) is a well-known name in the graphics, computing, and networking industries and its graphics processing units and the CUDA software platform have become crucial for AI infrastructure. At the CES 2025 event, the company revealed several new products.
CEO Jensen Huang presented innovations targeting AI applications, including those designed to advance robot and vehicle training, along with new gaming chips and a debut desktop computer. One of the highlights of the event was the introduction of Cosmos foundation models, a new AI model. These models, which generate photo-realistic video, offer a more cost-effective method of training robots and self-driving vehicles compared to traditional data usage.
Additionally, Huang unveiled the new RTX 50 series gaming chips, which incorporate NVIDIA’s (NASDAQ:NVDA) Blackwell AI technology, a key driver behind the company’s growth in data centers. Huang also provided a financial outlook for NVIDIA’s automotive hardware and software division, forecasting revenue of $5 billion for fiscal 2026, up from an expected $4 billion in fiscal 2025.
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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