In this piece, we will look at the stocks Jim Cramer recently discussed.
In his latest appearance on CNBC’s Squawk on the Street, Jim Cramer continued to share his thoughts on Monday’s stock market fallout from China’s DeepSeek AI models. For those out of the loop, DeekSeep wrought havoc on markets because it claimed to have developed AI models similar to OpenAI’s o1 and other platforms at a fraction of the cost. Even though the precise details about the cost of developing these models remained uncertain, investors jumped the gun and ended up evaporating a trillion dollars of value from stocks exposed to data center spending.
The hardest hit stock by the fallout was Wall Street’s favorite AI GPU firm. Investors exited their positions as they concluded that its GPUs might not be demanded in the quantities that they had previously assumed. This came despite CEO Jensen Huang’s prior assertions that even if AI demand was tepid, his firm would nevertheless benefit from the world’s data centers upgrading to accelerated computing platforms.
Accelerated computing is a key topic of discussion in computer science and semiconductors. Semiconductors, or chips, are fabricated with minute circuits that are nanometers in dimensions. This introduces physically driven limits to their production and limits the ability of newer Central Processing Units or CPUs to improve performance over predecessors.
To overcome these limitations, software engineers rely on graphics processing units, or GPUs through accelerated computing. When Cramer’s co-host David Faber asked him if accelerated computing was the present and the future, he agreed and shared “Yes it is, and I would tell you they [the GPU company] still have a tremendous lead.” Cramer then wondered whether China was an existential threat to the GPU company as it demonstrated methods to eke out more performance from fewer chips. Cramer commented “Is China an existential threat to them? What China says is that maybe you should pause.”
Amidst this uncertainty, the CNBC host advised users to keep in mind that some of the biggest entrepreneurs in the world were committed to spending billions of dollars for the GPUs. According to him “If Larry Ellison and Mark Zuckerberg and presumably Elon Musk are all buying the highest-end chips, do they not have knowledge about what’s going on in China? I think that’s fanciful. I think they had tremendous knowledge.”
Cramer also linked President Trump with the sentiment around the GPU company. According to him:
I mean Carl, the most substantive thing that people are hanging their hat on Trump and felt that they had to order. Now that’s almost conspiratorial. I think that they have more in mind, than just doing ChatGPT in an advanced way. And if that’s the case, then these companies in China they have figured out how to do the lower end. I think Jensen would say well that’s terrific. What we’re on is a very different plane. We’ve left that behind. . . . . That’s already in the industrial revolution. That’s the cotton gin. He’s talking about making the sewing machine. And I think that people don’t realize that he is a visionary and he is well ahead of everything we’re talking about.
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 29th, and in his Morning Take from his Investing Club morning meeting.
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).
9. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Holders In Q3 2024: 32
Nucor Corporation (NYSE:NUE) is one of the largest steel companies in America. Due to an overall sluggishness in the industrial and construction markets, the firm has not performed well lately. Nucor Corporation (NYSE:NUE)’s shares are down by 32.6% over the past year, with the decline also influenced by low steel prices. Steel companies, and Cramer, have attributed the drop to cheap Chinese steel flooding the market. In his latest remarks, Cramer shared additional details from Nucor Corporation (NYSE:NUE)’s about this issue:
“I had the Leon Topalian yesterday, he’s the CEO of Nucor, the country’s largest steel producer. The tariffs will be real. He believes that the Chinese will be shut down. It’s coming in from Canada and Mexico. And it will be a halcyon time. He is seeing a level of optimism among his customers which amounts pretty much everybody. That is surprising him. And it is meaningful to his numbers. Optimism.”
“Talk about reshoring. One of the things I really liked about Leon, he says, bring it on. We want reshoring, but we will go up against any steel company. One of the key things, they bought a company that makes steel that goes into warehouses.”
8. CAVA Group, Inc. (NYSE:CAVA)
Number of Hedge Fund Holders In Q3 2024: 32
CAVA Group, Inc. (NYSE:CAVA) is a restaurant company that owns its namesake establishments. Cramer has expressed cautioned optimism about the firm in his previous remarks. CAVA Group, Inc. (NYSE:CAVA)’s shares are 188.6% over the past year as they have been driven by a unique Mediterranean menu and careful price management to ensure that inflation-weary customers do not leave it. Previously, Cramer shared that it was possible that CAVA Group, Inc. (NYSE:CAVA) could grow to become as valuable as Chipotle. Here are his latest remarks for the firm:
“I’m seeing some definite things that interest me. If you walk through value at a price, . . . I’ve got CAVA tonight. Value at a price is winning. . . .And that’s something that I’m very excited about. Because one of the things that we’ve been concerned about, David, you know this, is inflation. And yet, when you look at the entire inflation beaters, which are companies that offer you a value at a premium. It’s working. Very interesting.”
“Yes and uh, it’s a terrific place. Mediterranean, this again, it’s that premium value.”