In this article, we will take a detailed look at Jim Cramer is Discussing These 10 Stocks Ahead of Q1 Earnings Season.
Jim Cramer in a latest program on CNBC talked about the winning sectors so far this year and said the trends show a “strange” pattern. Cramer specifically mentioned the oil and gas sector which he believed would underperform given President Donald Trump’s plan to keep energy prices lower.
“I thought this group would be down given that the president wants to expand drill and we have a slower economy, but the stocks aren’t expensive and demand for natural gas very strong,” Cramer said.
Cramer also talked about healthcare and other key sectors that performed well. He believes these patterns show that investors are turning to sectors that perform well during recessions. However, Cramer thinks the state of the economy is better than feared.
“The seven stocks that make up the S&P are too big to dismiss. You need at least some of them to put together a really positive tape. But the bottom line, it’s terrific to see such a broad mixture of stocks winning here, from ones that can run in a recession to ones that can rally hard in a robust economy. What it tells me is that the market may be far healthier than we think, and this backdrop simply isn’t as bad as many would have you believe.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 stocks Jim Cramer recently talked about during his programs on CNBC. With each company, we have mentioned the number of hedge fund investors. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. NiSource Inc (NYSE:NI)
Number of Hedge Fund Investors: 27
Jim Cramer was recently asked about utility company NiSource Inc (NYSE:NI). Here is what he said:
“I’ve liked NiSource forever. I’ve got to tell you, I recommended it when I was at Goldman Sachs, and that was like 140 years ago. I think you’ve got a good one there. I like consistency. It’s got it, as always, Dave delivers.”
9. Resmed Inc (NYSE:RMD)
Number of Hedge Fund Investors: 34
Jim Cramer said in a latest program on CNBC that he likes Resmed Inc (NYSE:RMD), which makes treatments for sleep apnea, chronic obstructive pulmonary disease, and other respiratory conditions.
“Mick Farrell came on the show and told me that my reservations about the recommended stock, which is about GLP-1, were misplaced and the company’s doing quite well. I’m with Mick, he’s never steered me wrong. I like the stock.”
Fidelity Growth Strategies Fund stated the following regarding ResMed Inc. (NYSE:RMD) in its Q3 2024 investor letter:
“The fund’s bigger-than-benchmark position in medical equipment designer ResMed Inc. (NYSE:RMD) (+15%) was the next-largest contributor. ResMed’s primary focus is sleep technology – it provides cloud-connected devices for the treatment of respiratory conditions like sleep apnea and chronic obstructive pulmonary disease. The stock declined sharply in the second half of 2023, in the wake of market speculation that the rise of weight-loss drugs would negatively impact sales and usage of ResMed’s devices. But it has risen steadily since then, helped this quarter by an August earnings report that showed steady sales and improving profitability. That said, the stock was no longer in the portfolio at quarter end.”
8. Ford Motor Co (NYSE:F)
Number of Hedge Fund Investors: 36
Jim Cramer was recently asked about Ford Motor Co (NYSE:F) on CNBC. Cramer reiterated his bearish view on the company and said he prefers GM over Ford.
“I think Ford’s got some warranty problems that make it so that earnings always seem to be a black hole. I am not going to bless that. If you feel that way, what you just said, I know GM doesn’t have that big a dividend, but I would prefer GM.”
7. Dollar Tree Inc (NASDAQ:DLTR)
Number of Hedge Fund Investors: 40
Jim Cramer in a latest program on CNBC recommended investors to stay away from Dollar Tree Inc (NASDAQ:DLTR) because of the changed consumer dynamics.
“Wall Street used to love the dollar stores because, unlike most retailers, they kept putting up stores, generating good growth. They went into neighborhoods other retailers steered clear of, carrying what looked like inexpensive merchandise. Well, that changed during the pandemic. They raised their prices, and raised them, and raised them, in order to pass on the value proposition, and it’s never been the same. There is no value proposition these days. The reduced sizes often give you the appearance of value, but people know when they’re getting had. That’s why I’d stay away from Dollar Tree. This thing does not represent the kind of value that we want, or that I used to get when we used to go there all the time, by the way.”
Carillon Chartwell Mid Cap Value Fund stated the following regarding Dollar Tree, Inc. (NASDAQ:DLTR) in its Q3 2024 investor letter:
“Dollar Tree, Inc. (NASDAQ:DLTR) operates a chain of discount stores under the Dollar Tree and Family Dollar banners. Results fell short of expectations amid pressure on the lower-end consumer, which prompted management to reduce its outlook for the year.”
6. Alcoa Corp (NYSE:AA)
Number of Hedge Fund Investors: 42
Jim Cramer recently talked about Alcoa Corp (NYSE:AA) and over aluminum market during a program on CNBC:
“I’m worried about aluminum. Aluminum has been down for three straight weeks. That does not bode well for Alcoa. I want to stay away.”
5. Twilio Inc (NYSE:TWLO)
Number of Hedge Fund Investors: 52
Jim Cramer was asked about cloud communications and technology company Twilio Inc (NYSE:TWLO). Here is what he said:
“Yeah, they did miss the quarter, and I think that I think the hype is too great on Twilio. I know everyone got all excited about it, but that’s a very crowded field. I’m going to have to say no, I don’t want to buy Twilio here.”
4. Reddit Inc (NYSE:RDDT)
Number of Hedge Fund Investors: 52
Jim Cramer said the following about Reddit Inc (NYSE:RDDT) during a program on CBC:
“Reddit, all right, Steve Huffman did a really good job. People were really—they gunned that stock ahead of the quarter. There was no way you could ever beat the expectations. It’s now come down tremendously, and I think this is a good time to start a position. The stock was up six today. I don’t want to buy up six. If it comes in on Monday or Tuesday, buy a little.”
With about 100 million daily active users, Reddit Inc (NYSE:RDDT) remains one of the fastest-growing social media platforms in the world. While Facebook and Twitter show signs of maturing growth, Reddit Inc (NYSE:RDDT) still has huge upside potential as more and more people flock to Reddit discussion boards for authentic opinions and discussion. User input from millions of people on various topics freely accessible to anyone is Reddit Inc (NYSE:RDDT)’s moat. As of 2023, users posted 16 billion comments on the platform, according to the company. That’s why companies are flocking to pay money to Reddit to use its data to train their AI models.
However, Reddit expects a slowdown in revenue growth for Q1 2025 compared to its Q4 2024 pace. But with the stock already down over 50% from its highs, this concern seems well accounted for in its valuation. Reddit expects Q1 2025 EBITDA margins of about 25.3%.
Munro Global Growth Small & Mid Cap Fund stated the following regarding Reddit, Inc. (NYSE:RDDT) in its Q4 2024 investor letter:
“Key contributors to performance over the quarter were Reddit and AppLovin (see stock story on page 5). Reddit, Inc. (NYSE:RDDT) delivered a strong set of results, demonstrating impressive revenue growth and expanding operating margins. As the world grapples with misinformation and AI-generated content, we continue to view Reddit’s position as a unique platform hosting the largest volume of human conversations globally becoming increasingly valuable.”
3. Discover Financial Services (NYSE:DFS)
Number of Hedge Fund Investors: 69
When recently asked about Discover Financial Services (NYSE:DFS) during a program on CNBC, here is what Jim Cramer said:
“I’m betting that the Capital One merger is going to work. I know that there are a lot of people who this week said bad things about the merger. I’m sticking with Capital One, which means I’m sticking with DFS. I think the deal is going to occur. I could be wrong, but I believe that the likelihood is that it does.”
Turtle Creek Asset Management stated the following regarding Discover Financial Services (NYSE:DFS) in its Q4 2024 investor letter:
“Two other companies that contributed positively to the flagship fund’s returns during 2024 happened to be the two most disappointing for us in terms of decisions taken by boards: Discover Financial Services (NYSE:DFS) and Berry Global. We wrote about Discover Financial last quarter so we won’t rehash things here, but we believe the board suboptimized long term value for shareholders through a variety of actions over the prior year and a half. If you are interest ed in more detail you can read about it here. Nevertheless, their actions resulted in a higher share price in the short term which we took advantage of to exit the position.”
2. Costco Wholesale Corp (NASDAQ:COST)
Number of Hedge Fund Investors: 75
A caller recently asked Jim Cramer about Costco Wholesale Corp (NASDAQ:COST). Here is what Cramer said:
“I care about profitability, I care about growth. Costco’s got them. Costco is a buy. Stock is way too low. I know people are thinking it’s rolling over, I think that’ll prove to be wrong. Buy some here, buy some next week.”
Aoris Investment Management stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q4 2024 investor letter:
“Firstly, I think we exercised good valuation discipline in our sales of Costco Wholesale Corporation (NASDAQ:COST) and Cintas. The share prices of these two companies had increased by more than 60% and 40% respectively in the year prior to our sale. It can be difficult as investors to remain objective and not ‘fall in love’ with an investment when it is performing well. A higher share price doesn’t make a business more valuable!
We sold both Costco and Cintas simply for reasons of valuation. These are exceptional businesses that we’d love to own again if valuation permits. Their sales allowed us to recycle portfolio capital into more attractively valued businesses.”
1. Alphabet Inc Class C (NASDAQ:GOOG)
Number of Hedge Fund Investors: 160
Jim Cramer in a latest program on CNBC reiterated his concerns about Alphabet Inc Class C (NASDAQ:GOOG) amid the impact of AI on search. Here is what he said:
“You know, I got to tell you, the more I look at it, the more I am concerned that they bought the Wiz. And I’m concerned, why am I concerned? Because I stopped going to Google. I can’t be alone. There’s just other places to go to.”
The market is reluctant about Alphabet amid threats to its search business from AI and the company’s aggressive AI spending plans $75 billion Capex for 2025). However, GOOG bulls believe these investments will pay off. The company needs to spend to maintain its dominance in search. Its Gemini model has an edge over competitors because of the huge ecosystem Alphabet already has. For the end user, it’s easier to switch from traditional search to Geminin instead of moving to a completely new app like ChatGPT or Perplexity. So far AI competition hasn’t dented the company’s search revenue.
Alphabet is in a position to offset any declines in traditional search by focusing on its booming YouTube business. YouTube could be worth up to $550 billion, according to a new MoffettNathanson note.
“This ranking, which measures total TV viewing across both linear and streaming platforms, underscores YouTube’s dominance in capturing audience engagement, surpassing traditional broadcast (and cable) giants like Disney, Fox, Paramount, and NBCU, as well as streaming leader Netflix,” analyst Michael Nathanson wrote in a note. “For this and several other reasons, we crown YouTube the ‘New King of All Media.’”
By the end of 2024, YouTube was the second-largest media company by revenue at $54.2 billion, trailing only Disney.
In the fourth quarter, Alphabet’s operating margin rose 32%. YouTube ad revenue jumped 14% and Cloud revenue skyrocketed by 30.1%. Google raked in $12.8 billion in FCF, marking a roughly 215% growth compared to the same period last year, despite heavy investments in AI. The stock has a forward (2026) P/E ratio of 20.8x, which makes it about 22% cheaper than the average company in its sector.
Burke Wealth Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q4 2024 investor letter:
Alphabet: We parted ways with long-term holding Alphabet during the fourth quarter. We’ve owned Alphabet since the inception of the Focused Growth strategy so obviously, the company has many positive attributes that we admire. That remains the case. We have long contended that Google search is the best business in the world. However, developments over the past couple of years on the competitive front (generative AI search) and the regulatory/legal front have put the sustainability of Google’s search monopoly at legitimate risk for the first time since Microsoft launched Bing in 2009. We cut our weighting in Google in half last year as we wanted to take some time to better assess the threat of generative AI driven search to its business model. To be fair, this emerging threat has been something more akin to a gathering storm than a tornado. Capital continues to flow into the space both from start-ups and the Microsoft/Open AI collaboration. Thus far, this has not resulted in a material erosion of market share but it is certainly something requiring continued monitoring….” (Click here to read the full text)
While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GOOG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at Jim Cramer Commented on These 8 Stocks Recently and Jim Cramer Put These 16 Stocks Under a Microscope.
