We recently compiled a list of the Jim Cramer’s Lightning Round: 7 Stocks to Watch. In this article, we are going to take a look at where Applied Digital Corporation (NASDAQ:APLD) stands against the other stocks to watch.
Jim Cramer, host of Mad Money, recently shared his thoughts following his interview with President-elect Donald Trump on the floor of the New York Stock Exchange. One of the key takeaways for Cramer was Trump’s comments about China. During the conversation, Trump emphasized his positive relationship with President Xi, which in itself was noteworthy.
However, Trump also remarked that China has not always been a responsible global actor and that this dynamic must change. Cramer highlighted that this is crucial for a number of reasons, particularly the need to protect Taiwan, which he sees as vital to safeguarding Taiwan Semiconductor, a company that plays a critical role in U.S. national security. Cramer also noted that the challenge lies in shifting China’s role from a long-standing adversary to a more balanced trading partner, a task he feels could be difficult given the longstanding trade issues between the two countries.
Cramer further pointed out the complexities of dealing with a country that has exploited U.S. trade policies for years. He said:
“But let me tell you what I think can happen, I believe President Xi needs the U.S. much more than people realize. The Chinese economy is more deeply indebted.”
READ ALSO Jim Cramer’s Game Plan for This Week: 8 Stocks in Focus and Jim Cramer Talked About These 6 Airline Stocks
When it comes to the stock market, Cramer found Trump’s approach to be refreshingly straightforward, without any unnecessary bravado. He also observed that Trump’s openness toward cryptocurrency could have significant implications for the future of the U.S. dollar.
“I also thought the President-Elect had no bluster when it came to the stock market, that was a very good thing… The president-elect’s affinity for crypto will ultimately give the dollar a strange bedfellow. I want our country to be the capital of finance and that means being the capital of crypto too.”
He added that for this relationship to develop positively, Washington would need to address the growing national deficit, which he believes could diminish some of the speculative appeal of cryptocurrency.
“I want to believe that the White House’s attitude toward business is important to the direction of stocks. The current president is often going way out of his way to show his disdain for any business people. But what’s more important is profits so it certainly doesn’t hurt that Trump talked about wanting to cut corporate taxes once again to let more money fall to you, the shareholder. Love him or hate him, you gotta admit that’s good for your portfolio, which by the way, is still the true north of Mad Money.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 13. 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.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An overhead view of a large-scale data center with rows of servers and blinking lights.
Applied Digital Corporation (NASDAQ:APLD)
Number of Hedge Fund Holders: 26
When a caller asked about Applied Digital Corporation (NASDAQ:APLD), Cramer said:
“Yes, you know, look, this [is] high-performance computing and you know, when I see high-performance computing, I think about a stock that everybody suddenly hates again and that’s the stock of Nvidia. And I’m not backing away from Nvidia. It’s actually been very good to my Charitable Trust and everybody else in the world.”
Applied Digital (NASDAQ:APLD) designs, develops, and operates digital infrastructure solutions, providing cloud services and high-performance computing for industries such as AI, machine learning, and crypto mining. With the rapid expansion of AI technologies, the company believes it is in a favorable position to provide advanced data center solutions and GPU cloud services to meet the growing demand.
In September, it raised $160 million through a private placement, a transaction in which shares are sold directly to investors instead of being offered on the open market. According to the company, it issued 49.38 million shares, and among the investors were Nvidia Corp. and Related Companies LP, a prominent real estate developer.
In addition to the lease agreement with a U.S.-based hyperscaler for its 100 MW facility that it highlighted during the first quarter of fiscal 2025 earnings call, Applied Digital (NASDAQ:APLD) management indicated that interest in the company’s data center offerings has significantly increased, with three additional hyperscalers expressing strong interest in securing capacity for 2025 and 2026.
This uptick in demand has driven the company to focus on expanding its capacity for these two years, and they noted that the 2025 capacity is essentially sold out. The company’s 100 MW facility in Ellendale, North Dakota, is expected to fulfill much of the demand for 2025, with additional efforts underway to secure a lease for another location, likely in the Dakotas, through a Letter of Intent.
Overall APLD ranks 5th on our list of the stocks to watch according to Jim Cramer. While we acknowledge the potential of APLD 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 APLD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
