In this piece, we will look at the stocks Jim Cramer recently discussed.
In his recent appearance on CNBC’s Squawk on the Street, Jim Cramer spent nearly all of the show either discussing stocks or the changed environment for AI data center stocks after the DeepSeek selloff. During the selloff, Wall Street’s favorite AI GPU stock lost close to $600 billion in market capitalization. Since then, AI data center investors have been greeted with several optimistic earnings call announcements that counter the narrative of DeepSeek leading to lower AI data center capital expenditure and lower demand for its products.
Since the selloff though, the stock still hasn’t risen to its former glory. While it dropped by 17% during the day and has gained 12.5% since then, the shares are still down by 6.6%. The shares appear to have regained some of their value due to growing evidence showing that the demand for AI chips still exists.
The rise is also relevant when we consider Cramer’s remarks in the selloff’s immediate aftermath. Back then, the CNBC host had outlined that he was watching two key metrics to determine the fate of the AI stock According to Cramer, the first metric is energy spending. Investors have piled into nuclear energy stocks due to the industry’s demand for clean energy to power gigawatt data centers. Cramer believes that any drawdown in energy spending or a slowdown of plans such as those to revive the Three Mile Island nuclear reactors could signal a paradigm shift in AI data center investing.
The second metric is GPU orders. On this front, earnings calls from big tech firms have painted an optimistic picture as no firm has significantly reduced their expenditure. Yet, Cramer had cautioned back then “But that’s not, necessarily, what people are going to announce, ‘listen, I’ve decided. . . If this thing only needs one-tenth of the power, one-tenth of the compute, well I’m going to cut my orders by nine-tenths.’ I’ve not heard that yet, but this thing is. . . a steamroll.”
While capital expenditure spending by big tech for data centers is an estimate of future capital outlays, a similar metric is the revenue earned by chip manufacturers. On this front, the world’s largest contract chip manufacturer based in Taiwan announced in February that it had earned a cool $8.93 billion in January to mark an impressive 39% annual growth. This revenue is from chips that will ship later this year, and it presented investors with insight into semiconductor demand immediately after the DeepSeek selloff. Although, granted that these orders were likely made before the selloff, the shares of the AI GPU stock jumped by 2.7% on the news.
During his show, Cramer shared details of a website that he came across. He outlined “Now there’s an outfit that I’ve been dealing with called you dot com. . . .I really like you dot com. It’s one of those companies that is really ahead of DeepSeek, it’s way ahead,” he shared. Cramer’s initial takeaway was that You.com’s advantage could hurt the GPU company. But, when he dug deeper, he found that the GPU company was actually one of the website’s biggest investors.”
Commenting on this discovery, he outlined “Once again you just find this, the long knives came out, whether it be China or whether it be Biden or whether it be these big hyperscalers, that said listen we don’t want [to buy the GPU company’s stock], we wanna scale back in [the stock] and then something happened which just said, you know, I guess we can’t.”
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 February 5th.
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. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders In Q3 2024: 78
PDD Holdings Inc. (NASDAQ:PDD) is a Chinese eCommerce company that is a new entrant in the domestic and international industries. Its shares are down by 11.6% over the past year as the firm has been beset by one set of bad news followed by another. PDD Holdings Inc. (NASDAQ:PDD)’s stock sank by 36% in August after the firm warned investors about a slow Chinese economy impacting its revenue. While the shares recovered soon after that, they slipped by 8.8% this year after President Trump’s tariffs against China. Here is what Cramer said about PDD Holdings Inc. (NASDAQ:PDD):
“We don’t seem to know, we don’t have a handle on what to do with PDD.”
“They’re social. Have you been hit by the Temu box. Like my daughter does some social. She suddenly gets two hundred dollars worth of Temu stuff. You know it arrives.”
9. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders In Q3 2024: 86
Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical giant whose revenue depends on its cancer and HPV vaccines. The two account for more than 70% of the firm’s sales and any weakness for either means that the stock struggles. Merck & Co., Inc. (NYSE:MRK)’s HPV drug GARDASIL is facing a sales slowdown in China due to regulatory crackdowns against doctors. In his previous remarks, Cramer commented that the firm heart drugs and other treatments are being overlooked by investors. Here are his recent comments about Merck & Co., Inc. (NYSE:MRK):
“[On MRK and EL] It’s funny you mention those two because of China. If you have China, then you are open for question. Because people say well wait a second, if you take a look at Merck, they really deny their people GARDASIL, which is a terrific vaccine and then you say wait a second maybe the vaccine problem is RFK Jr. Of Pfizer, I thought they had a good number. But what was going on there, RFK Jr. So you’ve got this kind of split, where the drug stocks are really getting hurt. It’s hard to get them moving. You do have this endless debate about how much people have to spend capex. Now we’ve heard it from almost everybody. But I think that in general when you get up in the morning and you see a sea of red, and you think everything’s going to get down, by the time you get here, you say to yourself, well wait a second, what really went wrong.”
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders In Q3 2024: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a chip designer that is the second largest player in the CPU and GPU markets. Its ability to target both markets has acted as an insulator for the firm against NVIDIA’s dominance in the AI industry. Advanced Micro Devices, Inc. (NASDAQ:AMD) has capitalized on Intel’s manufacturing woes, but the shares have lost 8.4% year-to-date as the firm struggles to displace NVIDIA’s high-performing GPUs. Cramer’s comments about Advanced Micro Devices, Inc. (NASDAQ:AMD) came after the firm’s fourth-quarter data center business and outlook disappointed investors:
“And then you know AMD didn’t help the case. Because AMD did not do well last night. . . yeah that Citi downgrade was substantive.”
“They have a transition going on.”
“You can’t [defend AMD] because it was indefensible. They basically talked about how things are going to be flat. That they don’t really have the right chips right now. They are doing very well versus Intel on the less expensive CPUs, but they kinda missed the cycle. Now they’ll catch up in the second half, but you don’t hear them in the mix. That’s the problem. Because they don’t have the right GPUs. That’s what’s going on.”
“[On CEO Lisa Su saying AMD delivered greater than $5 billion dollar data center revenue] Well true, but AI revenue is flat to down for the first half. And there’s going to be margin dilution. Which is why you’re seeing this. There’s an inventory build. There’s poor leverage to what they’re doing. This again cuts to you know who, I don’t need to say I anymore because I say it too much . . .NVIDIA.”
“[on next month being the anniversary of stock touching $227] Well I mean there was a time, look she was putting up, Lisa Su was putting up very big numbers. She is. Uh took about five billion dollar projections, she’s making that. But what most people say is, wait a second, this a halcyon time for what she makes, the GPUs, and she’s not delivering.”
“But look I think she’ll be back. They’re making a lot of money. But it’s fallen very much out of favor. And you got a downgrade today, and I just feel that people just say, you know what, NVIDIA won. NVIDIA won another round and the long knives are out for NVIDIA we’re waiting to hear what they’re going to do with China, we know that there are a lot of people who say that Amazon’s going to talk about more custom chips. Maybe that’s Broadcom. But Amazon, so far is not using AMD GPU. And that was what the customer they really needed and we don’t see it.”
7. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders In Q3 2024: 121
Netflix, Inc. (NASDAQ:NFLX) is the world’s leading video streaming company. Its shares are up by 84% over the past year and by 16% year-to-date. The stock has been helped on multiple fronts. Netflix, Inc. (NASDAQ:NFLX)’s ability to monetize its user base and add subscribers at a time when legacy media is struggling to grow users has injected optimism into the stock. Cramer has previously appreciated Netflix, Inc. (NASDAQ:NFLX)’s user engagement and content. This time around he stated that the firm is in its own class when it comes to the media industry:
“And then people say well wait a second, Netflix doesn’t have churn. And all I can say is, Netflix is a beast. And if you’re gonna go up against Netflix, you’re gonna make a comparison to Netflix, I mean that’s like making a comparison to 27 Yankees. Don’t do it.” “Now Netflix doesn’t need it, cause Netflix walks on water. I mean Netflix is incredible.”
6. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders In Q3 2024: 136
Uber Technologies, Inc. (NYSE:UBER) is the largest ridesharing company in America. Its stock depends on the value of bookings that the firm can record in a quarter. During the day Cramer made his latest comments about Uber Technologies, Inc. (NYSE:UBER), he interviewed the firm’s CEO Dara Khosrowshahi. The firm’s shares have gained 25% year-to-date, with the most recent catalyst being billionaire hedge fund boss Bill Ackman’s massive $2 billion stake in the firm. Cramer was left impressed after his interview with Uber Technologies, Inc. (NYSE:UBER)’s CEO:
“I wanna thank you, Dara. We can talk to you all day. . .because you’re very wise to what’s happening. I tend to discount the stock these days. People don’t understand. They should just listen to you, I think they’d get a better view.”
5. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Holders In Q3 2024: 158
Apple Inc (NASDAQ:AAPL)’s shares are down by 6.6% year-to-date primarily on the back of investors’ worries about escalating trade tensions between the US and China. They dipped by 3.4% in February after tariffs against China led to worries of profit margin erosion. Then, Apple Inc (NASDAQ:AAPL)’s stock lost another 1% after a report claimed that China was considering an investigation against the firm’s App Store platform. Cramer’s comments were made on that day:
“Look I think that, when you wake up and China’s doing what the Justice Department is doing to Apple. And then we think we freak out. They’re actually considering it, and I don’t mean to jump around too much.”
“You look at what Jonathan Kanter. . . around these days is talking about what they want Apple to do? Well, the Chinese communists are a little bit less aggressive than Kanter.”
“Okay, but Apple would tell you that they [Justice Department] were really tough. . . . come out and say, they were tougher than the communists.”
“I think that, they’re trying to figure out what to do, the Chinese. That was, we may look at it. Now this is something that if Eddie Cue were here, executive at Apple, he would say that oh my god, we did that with Justice, now we gotta do with these guys. But uh you know David, when you go after something that is a really good margin business like their Service revenue, everyone just gets a little bit nervous. But the stock has been down, down, down, down, down people are saying well I don’t know, maybe it can stabilize here.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders In Q3 2024: 193
NVIDIA Corporation (NASDAQ:NVDA) is the leading AI GPU designer that continues to make headlines in 2024. It started the year with a catchy CES keynote that saw CEO Jensen Huang extend the narrative about the firm’s GPUs to humanoid robots. Yet, less than a month later, NVIDIA Corporation (NASDAQ:NVDA)’s shares lost 17% during the DeepSeek AI selloff as investors pondered whether low AI development costs would lead to lower GPU spending. Cramer’s comments surrounded both these factors:
“[on cloud miss stemming from more demand than capacity] Yes it does [says good things for NVIDIA]. It says great things. Now, what people are still concerned about is if notice in their verbiage, that they’re gonna be the first to sell Blackwell. Well, wait a second I thought Blackwell was selling like mad. So that was a pause. Second, we have one more in this gauntlet, will Amazon say that they’re going to pause. Why didn’t Alphabet say, you know what, in light of DeepSeek, we’re going to maybe pause our spend but they couldn’t because they’re an honest company and obviously the CFO’s not gonna let them do that.”
“I mean, Carl, we sold down NVIDIA cause of a belief that it didn’t need all this capex. So far, everyone has said they do, Amazon’s the one that has the most that they’re working on, that’s away from NVIDIA. But, if Amazon says you know what, we’re gonna [inaudible] capex, then NVIDIA’s going to go up rather dramatically.”
“[On Citi reducing NVIDIA price target] I saw that. Right I mean I read through that and I said to the guys, I said to Jeff Marks and Ben Stoto, all right, here they go, here come the downgrades. The downgrades seemed almost out of sync. It really was much more of like all right, this thing’s not moving, so like let’s get away from it. It was not substantive. The only substantive thing I really found was that I keep thinking that Blackwell, which is the next generation, is selling like mad and to have the first customer, to learn that the first customer is finally taking it, tells me that it’s going to be much more forward and not now in front of us. But it’s going to happen, because obviously if you’re spending all this money you’re gonna get Blackwell. Then you say to yourself, why do you need Blackwell? Why do you need this incredibly important platform that has software? Well you need it for both inference and you need it for training. There are people who said with DeepSeek you don’t.”
“Now there’s an outfit that I’ve been dealing with called you dot com. . . .I really like you dot com. It’s one of those companies that is really ahead of DeepSeek, it’s way ahead. So I said oh my god, this is going to hurt NVIDIA. And he’s, well no actually they’re our largest investor. Once again you just find this, the long knives came out, whether it be China or whether it be Biden or whether it be these big hyperscalers, that said listen we don’t want NVIDIA, we wanna scale back in NVIDIA and then something happened which just said, you know, I guess we can’t. So I keep coming back to, well NVIDIA’s figured this out but people don’t want, people want a price break from NVIDIA. They do. Maybe a lot of this was, okay Jensen Huang, while you’re off there in the lunar new year and meeting the president, we need a better deal because this thing’s rumored to be thirty five thousand. It’s not a chip. We keep using the term chip. It’s a platform with software. That was another thing that people missed on DeepSeek. Platform with software. They can charge more and you can use the current plug it into the software.”
“I talked with Jensen about Blackwell. Blackwell’s video. I know that I talk too much about robots. And I know that. But if everyone gets a robot, which is the vision of the guy who runs DOGE, then we would all need a lot of NVIDIA power. Cause NVIDIA has robots that don’t walk into walls. And aren’t stupid. Let’s go back to and rewind the tape [about] why we liked NVIDIA so much. They were so far ahead of everybody else, well what happened? We found out that AMD has fallen behind. We found out the hyperscalers tended to need more than they got. We did get a DeepSeek story out of China. Which said that they didn’t spend a lot to be able to develop this product which I think is now proven to be false. That’s not just a Peter Navarro narrative, an anti-China narrative. There was a sense that maybe the Chinese lied.”
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders In Q3 2024: 202
Alphabet Inc. (NASDAQ:GOOGL) is the mega-cap technology giant whose shares haven’t performed well this year. The stock has lost 1.56% year-to-date primarily on the back of a lackluster earnings report which sent the shares tumbling by 7.3%. Investors were disappointed by Alphabet Inc. (NASDAQ:GOOGL)’s cloud business being unable to live up to AI-related revenue growth expectations. After the earnings, Cramer remarked that Wall Street was focused too much on the cloud business and was overlooking other aspects of the firm’s performance. During this particular appearance, he mentioned Alphabet Inc. (NASDAQ:GOOGL)’s video streaming service YouTube:
“[On earnings and capital expenditure] You’re listening to the call and you’re thinking well okay it’s pretty good, lot of good stuff here, YouTube is really strong and there’s a lot money being made [by] YouTube. You get very excited, and then they just drop a total bombshell. About how much they need to buy. And David, when I’m listening to it, I’m saying to myself, well what happened to DeepSeek, I thought, we all, were supposed to be cut. Did we all just get had on the DeepSeek story?”
2. Meta Platforms, Inc (NASDAQ:META)
Number of Hedge Fund Holders In Q3 2024: 235
Meta Platforms, Inc (NASDAQ:META) is a frequent appearance on Jim Cramer’s morning show. Recently, he’s been impressed by the stock’s winning streak that has seen the shares mark more than two weeks of consecutive daily gains. Meta Platforms, Inc (NASDAQ:META)’s shares are up by 19.7% year-to-date as its cost-cutting initiatives and AI tools to target advertisers and users on its platform resonate with investors. Cramer mentioned the stock’s winning streak and recent earnings:
“Has anyone just watched what Meta does? It just goes up everyday.”
“Well that last quarter was beautiful. When you talk to them, you realize, they’ve figured a lot out. I remember chiding them for thinking that Meta AI wasn’t going to be number one. It is number one. Now remember, it’s more for social. Like I look at it to see who, what act I can see when I go to the Super Bowl. And Meta AI will tell me. But if you look at it for high energy physics, like my nephew . . .would do because he was a freaking Latin scholar, switched to high energy physics at Harvard. He might say you know what Meta AI is not for him.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders In Q3 2024: 286
Amazon.com, Inc. (NASDAQ:AMZN) is a global eCommerce giant and a key player in the cloud computing industry. Like several other mega-cap tech stocks, its shares closed lower after fourth-quarter earnings on the back of weaker cloud computing revenue. Tech giants have spent billions of dollars on AI, and as Amazon.com, Inc. (NASDAQ:AMZN)’s cloud division posted $28.79 in cloud revenue to miss analyst estimates of $28.87, the stock dipped by 4%. Before the earnings, Cramer commented on how Amazon.com, Inc. (NASDAQ:AMZN) might talk about custom chips during the earnings:
“. . .we know that there are a lot of people who say that Amazon’s going to talk about more custom chips. Maybe that’s Broadcom. But Amazon, so far is not using AMD GPU. And that was what the customer they really needed and we don’t see it.”
AMZN is a stock Jim Cramer recently discussed. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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