In this article, we will take a detailed look at: Jim Cramer is Talking About These 10 Important Stocks.
Jim Cramer in a latest program talked about the latest market volatility and said using too many AI algorithms, data points and correlations could be useful for short-term traders but for investors, these tools could blur your long-term vision.
“I think as investors we’re putting on mental shackles if we behave like this. Remember back in my hedge fund, our whole goal was day trading, was to scalp pennies from the flow. That’s a lot of risk for not much reward. It’s better to zero in on dollars for the big picture. That’s what I want you to do.”
Jim Cramer said that the market is currently oversold and this happened twice before in 2024. These moments, according to Cramer, proved to be some of the best entry points to pile into stocks in hindsight.
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article we watched Jim Cramer’s recent programs and listed some of the stocks he commented on. For these stocks, we also 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. RH (NYSE:RH)
Number of Hedge Fund Investors: 39
Discussing home furnishing retailer RH (NYSE:RH) latest quarterly results, Jim Cramer praised the company’s CEO Gary Friedman:
“I would tell you that in a market where the worst housing markets in three decades have been pulled off, there’s finally a lot of his European expansion that’s good. In America, it’s been turning well ahead of where I thought it was going to be even last quarter. My hat is off to him. There’s a gigantic short position now, some of it’s set to convert, but Gary bought so much stock, and people just felt he was rolling the dice. But Gary knew his business, and I think he’s a delight. I think he’s a competitor like none other, and congratulations.”
RH (NYSE:RH) revenue in the recently reported quarter rose year over year while the company saw a 120.9% surge in adjusted operating income. During the earnings call, management disclosed that RH gained market share by 15-25 basis points in Q3 and expects to achieve another 25-45 basis points in gains during Q4. The housing market remains weak, so how was the company able to pull this off? The company is expanding to new products to support its outlet business and successfully launching new categories for baby, child, and teen products. RH anticipates that their contract, outlet, baby & child, and teen businesses will continue to drive business growth in FY25.
Polen U.S. Small Company Growth Strategy stated the following regarding RH (NYSE:RH) in its Q3 2024 investor letter:
“We exited four positions during the quarter, including SiTime, AppFolio, RH (NYSE:RH), Doximity, and Alight. We sold our position in furniture retailer RH due to our concerns over the company’s higher-than-average leverage in an uncertain economic environment. We also see the long-term growth outlook as less clear as the U.S. market matures and international expansion is nascent. We do not believe the valuation reflected this risk and envisioned opportunities for better returns elsewhere.”
9. Palantir Technologies Inc (NASDAQ:PLTR)
Number of Hedge Fund Investors: 43
Jim Cramer in a recent program commented on Palantir’s latest quarterly results:
“Palantir Technologies Inc (NASDAQ:PLTR) reported one of the best quarters of the year, showed fantastic growth and gross margins—growth and gross margins together, that is fabulous. They are excelling with federal contracts, including some important work for the Pentagon. They tend to win almost everything they tender for. They also have a great commercial group, but I like their defense work. It’s what I used to call a total up stock.”
That’s a shift from Cramer’s earlier views, in which he expressed his frustration over the lack of visibility into its business and called PLTR a meme stock.
“Palantir Technologies Inc (NASDAQ:PLTR) is a cold stock. It is a meme stock. It is a stock that has momentum because individual investors keep piling into it. It is not really even a stock; it is just a barometer of enthusiasm for some business that may or may not be doing well. I wish there were more to it,” he said a couple of months back.
What makes Palantir Technologies Inc (NASDAQ:PLTR) one of the top AI stocks? Its technologies are actually solving the problems of businesses. Palantir’s data technology Ontology is solving the famous hallucination problem for AI systems, thanks to the company’s years of experience with military and defense systems. Earlier this year at an event with customers, Palantir Technologies Inc (NASDAQ:PLTR) shared some specifics on how its customers are being able to reduce costs and increase profits due to its artificial intelligence platform (AIP) that was launched about a year ago.
Airbus accelerated A350 production by 33%, BP reduced costs per barrel by 60%, and Jacobs Connect cut power usage by 30%. Panasonic decreased waste by 12%, ESI Group sped up ERP harmonization by 70%, and PG&E reduced transformer ignitions by 65%. Eaton boosted productivity by 25%, while Tyson Foods achieved $200 million in cost savings.
Fidelity Growth Strategies Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q3 2024 investor letter:
“Untimely ownership of Palantir Technologies Inc. (NASDAQ:PLTR) (+47%) also hurt the fund’s relative result. This software and services firm, which operates in both government and commercial segments, saw strong growth during the quarter, largely driven by its “AIP” – or Artificial Intelligence Platform – offering. In early August, the company reported Q2 financial results that mostly met somewhat lofty expectations. We established a sizable holding in Palantir Technologies during the quarter, and at quarter end it was the second-largest position and a slight overweight.”
8. Chevron Corp (NYSE:CVX)
Number of Hedge Fund Investors: 63
Cramer in a latest program said the following about Chevron while talking about the impact of Donald Trump’s victory in the election on stocks:
“He’s not going to send the stock of Chevron Corp (NYSE:CVX) up when he says that there’ll be much more oil production that it’ll make up for whatever inflation we have in the system. We know that oil executives’ stocks get clobbered when they overproduced during Trump’s first Administration. They eventually got disciplined about pumping, but the results didn’t kick in until the Biden Administration. Yes, ironically, the oils thrived during the Biden regime, which was sincerely hostile to fossil fuels, especially with that moratorium on approvals of new liquefied natural gas exports.”
Carillon Eagle Growth & Income Fund stated the following regarding Chevron Corporation (NYSE:CVX) in its Q3 2024 investor letter:
“Chevron Corporation’s (NYSE:CVX) lagging performance was tied to a combination of weaker than expected second-quarter earnings and the delay of a much-anticipated merger with a global independent energy company. Performance during the quarter was largely related to the timing of outages and maintenance at several locations, which are shorter-term issues. While the pending merger looks attractive, prior expectations had the deal closing in 2024. It is now more likely to close in mid-2025.”
7. Linde PLC (NASDAQ:LIN)
Number of Hedge Fund Investors: 63
Jim Cramer in a latest program on CNBC said the following about Linde plc (NASDAQ:LIN):
“I mean, Linde plc (NASDAQ:LIN) in the end is an industrial company, and Industrials do go up when rates go down. You’re right. Look, the stock’s been weak this year; it’s not what I want. However, it’s been a great long-term producer. And let’s remember that this company has not had the luxury of having any volume growth yet—that’s going to happen in 2025. Stay long Linde PLC (NASDAQ:LIN), just like we do for the travel Trust.”
Mar Vista Global Strategy stated the following regarding Linde plc (NASDAQ:LIN) in its Q3 2024 investor letter:
“Linde plc (NASDAQ:LIN) is the world’s largest, global industrial gas producer. The company enjoys the highest profit margins and returns on capital in the industry. Linde’s primary products are atmospheric gases and process gases. Industrial gases have benefitted from secular growth trends in decarbonization and carbon sequestration. Moreover, the opportunity in blue and green ammonia and hydrogen are substantial. Projects in these areas are quickly being added to its backlog for future growth. We see these secular trends as long-term positives for Linde and the entire industrial gas industry.
Linde believes it can grow its volumes with new applications; the buildout of small, on-site plants using its technologies; and focusing on growing geographies such as India, Malaysia, Vietnam, China and Brazil. Despite the long-term growth opportunities, recent demand trends have slowed due to weak global industrial production and a challenging year-over-year comparable. Among the regions, the U.S. remains resilient, with volumes flat to slightly negative. Europe, Latin America, the Middle East, and China are all sending mixed to negative economic signals. We believe these slower trends are transitory in nature, providing an opportunity to purchase shares in Linde at attractive prices.”
6. PayPal Holdings Inc (NASDAQ:PYPL)
Number of Hedge Fund Investors: 90
Jim Cramer in a latest program yet again praised PayPal Holdings Inc (NASDAQ:PYPL) CEO Alex Chriss and recommended investors to buy the stock if it pulls back:
“If this stock comes down, you want to buy it because he’s (Alex Chriss) fixing PayPal Holdings Inc (NASDAQ:PYPL), and they’ve got a big February analyst meeting. You’re going to see how much he’s fixed. It was a company that was despised in the end by Wall Street because of a lot of overpromising and underdelivering. This man has had to apologize for much of what happened under the previous regime, but he’s about to go on the offense.”
PayPal Holdings Inc (NASDAQ:PYPL) CEO Alex Chriss is opening new growth horizons for PayPal Holdings Inc (NASDAQ:PYPL) beyond just a way to send or receive money. Thanks to his vast experience with small businesses at Intuit, he is integrating valuable features for customers and merchants to boost small business activity on the platform.
What are these features?
PayPal Holdings Inc (NASDAQ:PYPL) Fastlane offers a seamless checkout experience for customers by storing their data after the first purchase, making future transactions faster. Merchants benefit from higher conversion rates, with tests showing guest conversion jumping from 40-50% to around 80%. Fastlane also speeds up the checkout process by 32%, boosting customer satisfaction. PayPal Holdings Inc (NASDAQ:PYPL) charges merchants a fee for this service, which merchants find worthwhile given the increased conversions.
PayPal Holdings Inc (NASDAQ:PYPL) is also benefiting from its partnerships with companies like Meta, Salesforce, and Adobe. Its PayPal Complete Payments Platform (PPCP) has seen a 40% rise in SMB volume this year, thanks to new merchant integrations.
The company is also launching PayPal Holdings Inc (NASDAQ:PYPL) Ads, a high-margin opportunity that leverages its ecosystem of over 429 million active users. The platform allows merchants to target ads more effectively, increasing their return on investment.
PayPal has also dabbled into cards, with its debit card offering 5% cashback and integration with Apple Wallet. Recent European regulations also allow PayPal Holdings Inc (NASDAQ:PYPL) to use Apple’s NFC technology for contactless payments, enhancing its reach in international markets, especially in Europe where such payments are popular.
PayPal Holdings Inc’s (NASDAQ:PYPL) cash sits at about $14 billion, and long-term debt stands at only $9 billion.
Broyhill Asset Management stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2024 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL). We owned shares in PayPal based on its dominant position in the digital payments industry paired with its reasonable valuation. Following the recent share appreciation on the heels of the rollout of Fastlane, a product whose growth trajectory we see as unclear, we decided to step aside. We exited the position in September.”
5. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 99
Talking about Tesla Inc’s (NASDAQ:TSLA) spectacular stock performance on the back of the Trump rally, Cramer said the following in a latest program on CNBC:
“Elon Musk may be the second most important man in America; he may be the most important. As long as he stays tight with Trump, sure, Tesla issued a new software update today, and some people actually talked about that. But everyone knew it was coming. People have been buying this stock because they’ve realized that Musk has the president’s ear, and his loyalty will likely be returned with good news for Tesla Inc (NASDAQ:TSLA), especially the self-driving business. To me, it seems very transactional.”
A few weeks ago, Cramer explained why he believes buying Tesla stock just because of the Trump factor isn’t a very good idea. Read his analysis here.
The Trump factor has eclipsed Tesla’s fundamental weaknesses that were impacting the stock price before the Don’s win. The Tesla Robotaxi event disappointed investors. Notably absent was the discussion of a “more affordable” model that Musk had previously mentioned to boost confidence in Tesla’s vehicle sales growth outlook.
There is a lot of hype around Tesla Inc (NASDAQ:TSLA) robo taxis but many believe they will not be enough to fix the company’s long-term challenges.
What are these challenges?
Tesla Inc’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. Even Rivian’s CEO suggested Tesla Inc (NASDAQ:TSLA) could be nearing market saturation for these models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
Polen Focus Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q3 2024 investor letter:
“The largest relative detractors during the quarter were Apple, Airbnb, and Tesla (not owned). We’ve spoken at length about our rationale for not owning Tesla, Inc. (NASDAQ:TSLA). In short, the market seems to be pricing in a lot of positive optionality for this company in the near-to-intermediate term (and particularly a fully autonomous fleet of electric vehicles in the medium term). What exists today is an automobile manufacturer limited to the higher-income segment that is increasingly challenged to sell vehicles when interest rates are not zero. We continue to question the company’s long-term growth profile and governance.”
4. Adobe Inc (NASDAQ:ADBE)
Number of Hedge Fund Investors: 123
Jim Cramer said the following about Adobe in a latest program while discussing the impact of Donald Trump’s victory in the election on stocks:
“Trump’s pro-Business attitude won’t matter every day. There’s no way the president can expand the gross margins for Adobe Inc (NASDAQ:ADBE) or tell you to ignore the guidance for the next quarter, which was perceptibly weaker. This sent the stock down 75 points or 13%. If either ask for lower prices to compete or come up with something that makes it clearly superior to its rivals, no amount of presidential optimism is going to fix that.”
Parnassus Core Equity Fund stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q3 2024 investor letter:
“Also in the Information Technology sector, we exited a position in Adobe Inc. (NASDAQ:ADBE) and initiated a new one in Synopsys. Adobe is contending with market cyclicality, rising competition and lofty AI monetization expectations that are unlikely to be met in the near term. We sold Adobe for Synopsys, which faces fewer competitive threats and has room to grow as companies adopt Synopsys software for custom semiconductor design.”
3. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 158
Here is what Jim Cramer said in a latest program about Apple:
“I think Common Sense will take over underTrump’s justice department, which seems far more concerned with ideological issues involving Free Speech. Apple Inc (NASDAQ:AAPL) —not Apple—will be fine out of that because they’re not a media platform. That’s why the stock can keep rallying. It’s yet another reason why Apple’s giving you, get this, a 250,000% 18% gain since coming public 44 years ago. Take that, S&P.”
Cramer said Apple will benefit from the likely end of legal and regulatory issues for Apple in the new administration.
“We’re likely seeing the end of the Biden administration’s hairband attempt to hobble Apple.”
Apple Inc (NASDAQ:AAPL) has been seeing a long-term decline in mobile carrier upgrade rates, especially postpaid, for several years. This suggests that people are holding onto their devices longer, likely due to economic factors, satisfaction with current technology, or a lack of exciting new features in recent models. This trend isn’t great for Apple Inc (NASDAQ:AAPL).
Parnassus Growth Equity Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) shares rose during the quarter, making our underweight position a relative detractor. Investors reacted positively to the new iPhone 16 lineup and its advanced features, including generative artificial intelligence, greater durability and increased processing power.”
2. Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Fund Investors: 160
Talking about Alphabet in a recent program, Cramer said that he believes under Trump’s presidency, the Justice Department might not try to break up Alphabet Inc (NASDAQ:GOOG).
“The Biden Justice Department has been trying to dismantle this business, but I bet they won’t continue that under Trump. Plus, with GM’s self-driving business shutting down, Alphabet’s Waymo has one less competitor. I think that significantly boosts the value of Waymo if Alphabet ever decides to spin it off.”
The market has been ignoring Alphabet Inc (NASDAQ:GOOGL)’s key secondary businesses and the stock remains undervalued despite concerns around AI search and regulatory onslaught.
Alphabet Inc (NASDAQ:GOOGL)’s secondary ventures in AI, autonomous driving, and other areas are making solid progress, especially in the Waymo robotaxi segment. Currently, Alphabet Inc (NASDAQ:GOOGL)’s stock trades below 20 times forward earnings, offering potential upside as EPS and other financial metrics strengthen in coming years. For next year, the consensus EPS estimate sits around $9. However, Alphabet Inc (NASDAQ:GOOGL) has consistently beaten projections, delivering $7.54 in trailing twelve-month EPS compared to the expected $6.79—a roughly 11% outperformance.
With the 2025 EPS forecast at around $9, Alphabet (NASDAQ:GOOGL) could realistically achieve earnings closer to $10 if it maintains its historical outperformance rate. At a projected $10 EPS, Google’s forward P/E multiple would be approximately 17, a relatively low valuation for a diversified market leader.
What are the key drivers for Alphabet (NASDAQ:GOOGL)?
Alphabet Inc (NASDAQ:GOOGL) remains on track to reach a $100 billion revenue run rate from YouTube Ads and Google Cloud by the end of 2024. In its autonomous driving division, Waymo has shown notable progress, with paid autonomous rides growing 200% quarter-over-quarter to 150,000 weekly rides as of late October, thanks to a fleet of 700 vehicles in service since August.
This growth is significant: Waymo vehicles now average about 30.6 autonomous rides per day—substantially higher than Uber’s average of 4.18 rides per driver daily, based on Uber’s 31 million daily trips and 7.4 million drivers last quarter. This performance underscores Waymo’s competitive edge in autonomous ride volume compared to traditional ride-hailing.
In the third quarter, Alphabet Inc (NASDAQ:GOOGL)’s Search & Other segment saw a 12.2% year-over-year revenue increase, rising from $44.03 billion to $49.39 billion. YouTube advertising also performed well, with revenue up 12.2% to $8.92 billion from $7.95 billion. Meanwhile, Alphabet Inc (NASDAQ:GOOGL)’s subscriptions, platforms, and devices revenue grew even more sharply, surging 27.8% from $8.34 billion to $10.66 billion.
Google Cloud has been expanding steadily, with revenue climbing from $13.06 billion in 2020 to $33.09 billion in 2023. Notably, Google Cloud turned profitable for the first time in 2023, posting $1.72 billion in operating profit—a significant improvement from a $5.61 billion loss in 2020. This segment’s performance continues to strengthen, with the latest quarterly revenue reaching $11.35 billion, up 35% from $8.41 billion in the same period last year.
Conventum – Alluvium Global Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG), ie Google/YouTube, having returned 20.8% in the June quarter, gave a fair bit of that back by falling 8.8%. Its results seemed pretty positive, and appeared to beat expectations. Management claims its AI integration into its search business is working well, and the margin expansion from costs out is expected to continue. Market chatter suggests that the selloff stems from concerns about the high capital spending on servers and data center equipment. Alphabet has made it clear that this spending is necessary, and somewhat defensive as it can’t risk losing the AI war (a “build it, and they will come” approach). Also, the new Department of Justice case against it probably did not help matters. Nonetheless, we saw no need to adjust our estimates. We wrote last quarter that it traded at a premium to our valuation, but not so much as to warrant selling. With the share price falling and the premium reducing, our view is unchanged. It represents 4.4% of the Fund.”
1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Investors: 286
Jim Cramer in a latest program talked about the likely departure of FTC Commissioner Lina Khan and its impact on Amazon.com Inc (NASDAQ:AMZN) shares.
“Khan, who, as I mentioned, was relentless in her attempts to smash Amazon—boy, did she hate Amazon—believes it’s too powerful. As she put it, “Amazon’s actions allow to stop Rivals and sellers from lowering prices, degrade quality for Shoppers, overcharge sellers, stifle Innovation, and prevent Rivals from Fairly competing against Amazon.com Inc (NASDAQ:AMZN).” But what’s missing? How about the fact that Amazon Prime is the greatest bargain in the world and has managed to lower prices for 200 million users? If you’re a merchant and don’t like their platform, just go to Shopify, for heaven’s sake. It’s not like Amazon is sending the mafia to put its rivals out of business—it’s just great at what it does. How could the FTC be so out of step with America? How could it be so ideological and so disrespectful of Amazon.com Inc (NASDAQ:AMZN) or even the reputation of its own organization?”
Amazon.com Inc (NASDAQ:AMZN) threw it out of the park with its latest quarterly results amid strong Cloud growth. Amazon Web Services has generated $27.5 billion in revenue, marking a 19% year-over-year increase. The segment’s operating income is expanding at nearly 2.5 times the rate of its revenue growth, boosting Amazon.com Inc (NASDAQ:AMZN)’s overall operating income. At this pace, AWS is on track to deliver $110 billion in annualized revenue. If it maintains its ~20% growth rate, AWS could reach $125-130 billion in revenue in FY 2025.
For the ongoing quarter, Amazon.com Inc (NASDAQ:AMZN) expects revenue between $181.5 billion and $188.5 billion, implying growth of up to 11%. Amazon.com Inc (NASDAQ:AMZN)’s stock currently trades at a forward P/E of 32.9, higher than the big tech average of 25.5. If Amazon.com Inc (NASDAQ:AMZN) grows its earnings per share (EPS) by an average of 25% annually over the next three years, it could achieve an EPS of around $9.25 by FY 2027 (up from an estimated $4.74 in FY 2024). Applying a 35x P/E ratio in line with Amazon.com Inc’s (NASDAQ:AMZN) historical average suggests a fair stock value of over $300. The primary catalyst for this target would be AWS’s robust operating income growth.
Meridian Hedged Equity Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a leading e-commerce company that operates a vast online marketplace for third-party sellers, sells its own products, and provides cloud infrastructure services through Amazon Web Services (AWS). We own Amazon because we believe AWS and advertising will continue to drive long-term revenue growth and profitability improvements. Although the stock didn’t perform well this quarter, we attribute this to a mix of short-term factors, including macroeconomic headwinds impacting consumer and enterprise spending, slowing retail revenue growth, and retail margin expansion falling short of market expectations. Additionally, increased investment in longer-term initiatives like satellite broadband and other experimental projects put further pressure on margins. Despite weaker-than-expected third-quarter guidance, we believe Amazon’s long-term growth story remains strong. We see multiple levers for improved profitability and free cash flow generation over time. We maintained our position in the company during the period.”
While we acknowledge the potential of Amazon.com Inc (NASDAQ:AMZN), 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 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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