In this piece, we will look at the stocks Jim Cramer discussed after the DeepSeek AI selloff.
In his recent appearance on CNBC’s Squawk on the Street, Jim Cramer continued to discuss the fallout from DeepSeek’s AI models purportedly reducing the costs of training and developing AI platforms. While the TV show host did not comment on the costs, about which little is currently understood, he did speculate about the link between DeepSeek and OpenAI.
As DeepSeek’s R-1 becomes more popular, several users have reported that it delivers answers similar to those from OpenAI’s models. In fact, Bill Gates’ software company is allegedly investigating the link between OpenAI and DeepSeek. As per Bloomberg, the software company’s security team discovered “observed individuals they believe may be linked to DeepSeek exfiltrating a large amount of data using the OpenAI application programming interface, or API.”
Cramer also wondered the same thing during his appearance as he questioned “How much did this outfit, DeepSeek, steal from OpenAI?” The TV show host however added that he was nevertheless impressed by DeepSeek’s AI “Because it is much lower cost.” However, some things that remain unanswered for Cramer are “Whether what they stole, I question how good it is, I question the hallucination factor. I question the, when I went on it, it was stupid as wood. I mean look, there are some real problems here. But the calculations are good.”
The conversation then shifted to whether DeepSeek’s splash in the West revealed that the software engineers in China were as good as those in the US. Cramer sarcastically commented “Shocker. What they thought they were blockheads?” However, while his assessment about Chinese software engineers was correct, he controversially added “We are so far ahead of them, because we’re doing robots and cars. Where’s their robots and cars?”
Cramer’s remarks about the Chinese automotive and robotics industries prompted co-host David Faber to retort that China leads the world with EVs. Cramer then tried to clarify his stance by outlining a few individuals that he believes offer America a competitive edge over China. “I’m saying that Elon, their Elon. The Jensen-Elon Musk partnership,” he shared. Cramer further added “I’m talking about the supercomputer solution. I think is a brilliant solution by Musk.” The supercomputer that he’s referring to is Musk’s plan to build the world’s largest supercomputer in Tennessee which will house a million AI GPUs.
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC’s Squawk on the Street aired on January 28th.
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).
10. Brown-Forman Corporation (NYSE:BF-B)
Number of Hedge Fund Holders In Q3 2024: 24
Brown-Forman Corporation (NYSE:BF-B) is an alcoholic beverage firm that sells wines, spirits, cocktails, and other alcoholic beverages. Its premier product is Jack Daniel’s whiskey. High inflation has hampered Brown-Forman Corporation (NYSE:BF-B)’s revenue and led to its shares losing 42% over the past year. Cramer has discussed the stock several times this year. He believes that Brown-Forman Corporation (NYSE:BF-B)’s management erred by diverting attention and funds away from Jack Daniel’s to other brands. He also believes that high prices are another factor behind the firm’s poor performance:
“Well look I think that the public is much savvier knowing that when there is inflation, stay away. I mean I follow the liquor industry of course cause my wife’s got mezcal, and I spend a lot of time looking at Diageo and Brown Forman. Those guys have to cut prices. They have to. I mean you have to cut prices. Kimberly Clark, do they have to cut prices? If you don’t cut prices, the [inaudible] will take advantage of it. We finally have, people who are trying to cut prices. Very good.”
9. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders In Q3 2024: 26
Diageo plc (NYSE:DEO) is one of the largest alcoholic beverage companies in the world. The firm sells a wide variety of products such as wine, gin, vodka, and rum. Some of its best-known brands include Johnnie Walker and Smirnoff. Like other alcoholic stocks, Diageo plc (NYSE:DEO)’s shares have also lost 16% over the past year. The shares have performed poorly as the firm has struggled in a tight consumer environment that led its sales to drop by 1.2% in fiscal year 2024. Cramer believes that one way Diageo plc (NYSE:DEO) might be able to reverse its ill fortune is by reducing prices:
“Well look I think that the public is much savvier knowing that when there is inflation, stay away. I mean I follow the liquor industry of course cause my wife’s got mezcal, and I spend a lot of time looking at Diageo and Brown Forman. Those guys have to cut prices. They have to. I mean you have to cut prices. Kimberly Clark, do they have to cut prices? If you don’t cut prices, the [inaudible] will take advantage of it. We finally have, people who are trying to cut prices. Very good.”