In this article, we will take a detailed look Jim Cramer is Talking About These 10 Stocks.
Jim Cramer in a latest program on CNBC said that the market is narrowing again as he sees gains getting concentrated in big tech stocks again amid bond movements.
“If the bond market doesn’t start behaving and calming down, and long-term interest rates don’t stop going up, we are gonna start losing the groups that led us higher for months and go back to our bad old ways with just a couple of magnificent ones.”
Jim Cramer said that this trend was more or less expected as market assumptions following the 50bps rate cut by the Federal Reserve proved to be wrong down the road.
But then that darn double cut—we saw something that hasn’t happened since 1995. We saw loan rates go higher, not lower. It was a total buzzkill, and we’re beginning to feel it with earnings.
Cramer then talked about a latest earnings report from a notable homebuilder that showed soft results, indicating a weaker consumer. Cramer then summarized his thesis again on why he sees the overall market trajectory in what he called a “suboptimal situation.”
“If interest rates don’t stop rising quickly—they can go up slowly, but this quick rise means we’ll go right back to the same old story. Only a few big tech stocks were winning, while many more were losing. In other words, we’re on the verge of what I can describe as an extremely suboptimal situation if the bond market doesn’t settle down.”
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article we watched several latest programs of Jim Cramer on CNBC and picked 10 stocks he’s talking about. With each company we have mentioned its hedge fund sentiment. 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. Trump Media & Technology Group (NASDAQ:DJT)
Number of Hedge Fund Investors: 9
Answering a question about Trump Media & Technology Group (NASDAQ:DJT) in a latest program, Jim Cramer said:
“I want so much to be better at that one. That’s what I call an okay company. There’s just not enough information. No analysts, no coverage. I cannot get a bead on it.”
Perhaps the biggest bull case for DJT is the rising probability of Donald Trump becoming US President again. Trump Media & Technology Group (NASDAQ:DJT)’s core business is not impressive.
The platform has struggled to attract advertisers, despite reports of more than 2 million active users on Truth Social. A significant factor behind Trump Media & Technology Group (NASDAQ:DJT)’s revenue dip is a decline in web traffic. Despite an uptick in political betting odds for Trump’s potential presidency, this hasn’t sparked a rise in user numbers on the platform. During the spring and early summer, as his chances of a presidential win grew, CNBC noted that Truth Social’s traffic still slipped.
In its latest earnings reported in August, Trump Media & Technology Group (NASDAQ:DJT) posted a 30% drop in net sales year-over-year to $836,900, while operating losses grew from $3.8 million last year to $18.7 million.
9. GXO Logistics Inc (NYSE:GXO)
Number of Hedge Fund Investors: 29
A caller recently asked Jim Cramer about GXO Logistics. Here is what he said:
“I think you should hold it. It’s a really good company. It would be icing on the cake if you do get a takeover, but GXO’s been a winner. I’m not leaving that stock; I’m staying with it.”
GXO Logistics Inc (NYSE:GXO) manages supply chains for businesses by providing warehousing, transportation, and logistics services. They store products in strategically chosen warehouses and use advanced technology to optimize efficiency and reduce costs. Out of 974 facilities, 613 are leased, with only two owned. Leasing not only reduces costs but also offers flexibility, allowing them to scale operations easily as needed.
Analysts believe GXO Logistics Inc (NYSE:GXO) will grow on the back of the ecommerce revolution. Handling e-commerce orders is more profitable for GXO Logistics Inc (NYSE:GXO) than traditional wholesale or retail setups because it requires more handling. According to GXO Logistics Inc (NYSE:GXO), they can generate three times more revenue from e-commerce orders compared to wholesale and retail, with the revenue multiplier reaching up to six times in the case of returns.
The shift to e-commerce has been growing for over a decade, but the industry saw substantial growth following the COVID-19 pandemic. According to a chart from GXO Logistics Inc (NYSE:GXO)’s investor presentation, they estimate that e-commerce penetration as a percentage of total retail sales could double in six years, reaching approximately 30% by 2027.
Mar Vista Strategic Growth Strategy stated the following regarding GXO Logistics, Inc. (NYSE:GXO) in its first quarter 2024 investor letter:
“GXO Logistics, Inc. (NYSE:GXO) experienced a setback this quarter. Customer volumes dropped 9%, stalling any organic growth. This slump was primarily driven by weakness in the omnichannel retail and consumer packaging sectors. As a result, the company’s 2024 forecasts fell short of analyst expectations, leading to a drop in share price after the announcement.
Despite cyclical headwinds, there are signs of a turnaround for GXO. Management indicated that customer volumes in January have already begun to improve. Additionally, they expect easier comparisons in the later half of 2024 to further aid recovery. To us, this suggests that the first half of 2024 may be the cyclical low point, with a rebound on the horizon. Over the next few quarters, GXO should get back on track towards achieving its long-term financial goals.”
8. ARM Holdings Plc (NASDAQ:ARM)
Number of Hedge Fund Investors: 38
A caller recently asked Jim Cramer about ARM Holdings Plc (NASDAQ:ARM).
Cramer said “yes, ARM’s good” and recommended the investor to buy the stock.
Cramer said that ARM Holdings Plc (NASDAQ:ARM) has a “tremendous” relationship with Softbank’s Masayoshi Son.
“I think that the support there is gonna make it so he got a lot of runaway. I like him.”
William Blair analyst Sebastian Naji recently started covering Arm Holdings PLC – ADR (NASDAQ:ARM) with an Outperform rating.
The analyst said the chipmaker is seen as a “critical vendor” of computing intellectual property with “best-in-class” financials. He said the company generates revenue from over 29B chips sold in the mobile, automotive, IoT, and data center markets.
“Arm’s royalty/licensing revenue model drives best-in-class profitability— R&D is the largest expense, 35% of total revenue in fiscal 2024. With expanding royalty rates helping drive better operating leverage (long-term target of 60% non-GAAP operating margin), we see room for sustained EPS and free cash flow growth,” the analyst said.
Arm Holdings PLC – ADR (NASDAQ:ARM) has unveiled its latest processor design, v9, which features significant upgrades like enhanced encryption and vector processing. These improvements have allowed ARM to double its take-rate compared to the previous v8 design, which is expected to boost royalty revenue over the next few years, according to analyst Naji.
The company, led by Rene Haas, is also seeing growth from its mobile CSS and data center Neoverse subsystems, driving new licensing activity. Arm Holdings PLC – ADR (NASDAQ:ARM) is gaining traction in the data center market, traditionally dominated by Intel. With hyperscalers like Amazon, Google, Microsoft, and Meta developing their own chips and Nvidia leading the AI accelerator space, Arm Holdings PLC – ADR (NASDAQ:ARM) is positioned to benefit from this growing sector. Naji estimates ARM’s data center business could account for 15% of its royalty revenue by 2025.
7. Boeing Co (NYSE:BA)
Number of Hedge Fund Investors: 42
Jim Cramer in a recent program recommended investors to buy Boeing Co (NYSE:BA) on the weakness because of the company’s dominance in the market.
“Welcome to the world of duopoly. The worse the financials might be, the better the buy, because as soon as the strike is over and they raise some money, they will be back on the road to profitability. The company is in awful shape, but only two companies can make commercial aircraft. And Boeing is one of them. The demand for planes is off the charts. They will be fine once they raise the cash.”
However, Boeing Co (NYSE:BA) acknowledged that Boeing has become a “colossal disaster” but he’s still hopeful of a turnaround.
“They have to get back to the basics, building the best aircraft. It can do that if they can close out what is losing money and get the machinists back with maximum supervision. It will have enough orders to feast on for years. That’s why it can spring back.”
Jim Cramer was previously bullish on Boeing Co (NYSE:BA). Why? The new CEO was the main reason.
Kelly Ortberg has a degree in Mechanical Engineering, and brings a technical background to the role, a shift from the accounting-focused leadership that investors have found concerning.
Boeing Co (NYSE:BA) is also increasing production rates, having already increased output and reactivated its third 737 MAX assembly line. The company has submitted a comprehensive plan to the FAA, aiming to surpass the current cap of 38 MAX airplanes per month. While these measures will not immediately impact earnings, they signal Boeing Co (NYSE:BA)’s commitment to sustainable growth.
On the certification front, Boeing Co (NYSE:BA) is progressing with solutions for the 737 MAX 7 and MAX 10, and has entered a new phase in the 777X certification campaign. These developments are seen as positive.
Boeing Co (NYSE:BA) has made progress with the 737 MAX program. Boeing Co (NYSE:BA) has reduced traveled work, leading to cleaner fuselages and improved quality and reliability. Boeing’s submission of a comprehensive safety and quality plan to the FAA marks an important milestone. Production has increased from a low single-digit rate in the first quarter to 25 airplanes per month in June and July, though still short of the target of 38 airplanes per month by year-end. This increase suggests progress in managing manufacturing quality.
However, with worker strikes ongoing and credit ratings in danger, Boeing Co (NYSE:BA)’s journey back to normality will be long and hard.
6. Kroger Co (NYSE:KR)
Number of Hedge Fund Investors: 46
A questioner recently asked Jim Cramer whether Kroger Co (NYSE:KR) was undervalued. Cramer replied “you are right.”
“With Albertson, I think it’s better because they’ve got to go up against Costco, Walmart, and Amazon. Without it, they still do well, but frankly, look, this administration—I think they’ll hold this deal up from now until, I don’t know, this thing’s tapped out.”
In the most recently reported quarter, Kroger Co (NYSE:KR) saw sales of $33.91 billion, a modest 0.2% rise from the $33.85 billion posted in the same quarter last year. The figure also surpassed analyst expectations by $207 million.
Kroger Co (NYSE:KR) said there was a 17% surge in delivery sales, driven by the company’s Customer Fulfillment Centers, with its online grocery customer base growing 14%. Kroger’s digital sales strategy, once unexpected in the grocery sector, has gained traction.
5. Chevron Corp (NYSE:CVX)
Number of Hedge Fund Investors: 64
Jim Cramer recently visited Chevron Corp (NYSE:CVX)’s offshore facility in the Gulf of Mexico. During a program on CNBC from the facility, Cramer said that Elon Musk was “wrong” when he said during the latest Tesla event that ICE cars are becoming a “niche business.”
“He (Elon Musk) said gasoline-powered cars will soon be a niche business, invoking the horse—a veiled reference to the buggy. I say, wait a second. Chevron Corp (NYSE:CVX)’s a big company too. CEO Mike Wirth, our guest tonight, did not spend more than $5 billion on this thing because fossil fuel-powered cars will be a niche business. Elon Musk, while he talks a better game than just about anyone, and I think Tesla’s got tons more room to run—how about that? But he’s wrong on this,” Cramer said.
The CNBC host then made the case of fossil fuels and natural gas and said conventional energy would be needed to fulfill the insatiable demand coming from data centers.
“If we need more energy, we’re going to get it from what comes out of the ground in places like this—fossil fuels that will power the data center, specifically natural gas.”
4. American Express Company (NYSE:AXP)
Number of Hedge Fund Investors: 68
Jim Cramer said in a latest program on CNBC that American Express reported strong quarterly results but Wall Street failed to recognize American Express Company (NYSE:AXP)’s strengths. He hit the “buy, buy, buy” button on the stock.
“For some reason, the market can never figure out how to properly judge the results from American Express Company (NYSE:AXP). I’ve lost track of the number of times that I’ve had to come out here and tell you Wall Street’s gotten another American Express Company (NYSE:AXP) quarter wrong.”
Jim Cramer then went on to analyze American Express Company (NYSE:AXP)’s results and pointed out why the stock fell after the results.
“I think Wall Street doesn’t know what to do with Amex’s gradual slowdown in revenue growth. It was just 8% this quarter. They’ve gone from basically the low double-digits to the high single digits over the past year. This isn’t so much an issue for the company’s current results, but it makes some investors question whether they can hit long-term targets.”
Jim Cramer then quoted American Express Company (NYSE:AXP) CEO’s comment from the latest earnings call:
“What our card holders will do is pull back slightly if they lose any confidence, see any sort of signs of their own stress but they will continue to pay their bills, and that’s why our credit numbers are so good. I think when you look at the organic piece of this, you see this especially within our small business. Our small business has been hit from a macro perspective. I think just like a lot of other companies, small business and at the organic spend or the same-store sales spend that is occurring on the card in small businesses is certainly not as robust as it was coming out of the pandemic. In fact, it is negative because when you look at our small business, our acquisition is good and our retention is really good. It is that organic spend that’s down.”
Read the full earnings call transcript here.
Cramer commented in this:
“That’s a fairly honest, sober assessment of the state of Amex’s business right now. Somehow the company has been able to post amazing earnings numbers, and the environment should get much easier as the Fed cuts rates.”
Cramer then explained exactly why is he bullish on the stock:
“Let me allow to explain the long-term opportunity here, which is American Express has the potential to grow with its legions of younger cardholders. Remember, they’re seeing terrific spending growth from millennials and Gen Z. Older customers are basically flat, but people seem to overlook the fact that this is a very positive indicator for the company’s future. See, once American Express lands these younger customers, there is a very good chance they’ll be able to hold on to them for life.”
Cramer told investors that “you have to trust me on this because I’ve been right the analysts have been wrong” as he explained he what called a “fantastic buying opportunity” around the stock.
Artisan Select Equity Fund stated the following regarding American Express Company (NYSE:AXP) in its first quarter 2024 investor letter:
“American Express Company (NYSE:AXP) shares rose 22% this quarter. This is an interesting case study given our earlier discussion about inflation. American Express operates one of the largest credit card networks in the world. Its revenue is largely a function of a fee rate applied to the dollar value of goods and services that are transacted through its network. That dollar value is, of course, nominal. As inflation pushes up the value of those goods and services as it has for the past few years, American Express will capture that value through its fee structure. The past few years inflation has clearly been a benefit. Aside from its inherent inflation protection, the business is a very strong one. Payments continue to shift toward electronic forms, benefiting American Express. It also has a strong brand that attracts loyal and highly profitable customers that are the envy of the industry. Recent results have been strong with revenues moving nicely ahead of GDP.”
3. LAM Research (NASDAQ:LRCX)
Number of Hedge Fund Investors: 84
Answering a question about LAM Research (NASDAQ:LRCX) in a latest program on CNBC, Jim Cramer said:
“I like it very much. Lam Research should not have gone down today. I think it’s doing extraordinarily well and is not linked with ASML. They’ve already explained their level of Chinese exposure and mentioned they had to reduce it. So, the answer is I would buy.”
Lam Research Corporation (NASDAQ:LRCX) is one of the largest providers of etching equipment for the semiconductor industry. Etching refers to any technology that will selectively remove material from a thin film on a substrate.
China-related concerns have weighed on the stock but the bulls believe that’s an overreaction and the stock has secular growth catalysts, especially due to AI.
As the third-largest semiconductor equipment supplier globally, LAM Research (NASDAQ:LRCX) dominates the etching process. Over the past decade, LAM Research (NASDAQ:LRCX)’s market share has averaged between 45% and 55%. The semiconductor equipment market has consolidated among a few major players, creating an oligopoly. Similar to how ASML dominates lithography, AMAT and Tokyo Electron control deposition, and KLAC leads in process control, LAM Research (NASDAQ:LRCX) benefits from high switching costs, large R&D investments, and experience-driven improvements. These factors contribute to its strong EBIT margins and return on capital.
LAM Research (NASDAQ:LRCX)’s largest customers are memory manufacturers, who have increased their use of Memory Wafer Fabrication Equipment (WFE). From 2010 to 2023, memory WFE consumption accounted for 64% of total WFE, up from 46% during 2001-2009. Additionally, as semiconductor designs have evolved from 2D to 3D, more etching steps are required in the manufacturing process, further driving demand for LAM Research (NASDAQ:LRCX)’s equipment.
Artisan Select Equity Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q2 2024 investor letter:
“The top contributors to performance for the quarter were Alphabet, Lam Research Corporation (NASDAQ:LRCX) and Elevance. Lam Research shares rose 10% during the quarter and are up 67% over the past year, primarily due to optimism around the pending investment cycle in semiconductor capital expenditures. Lam is one of the largest equipment manufacturers used to make semiconductor chips. This equipment, commonly referred to as WFE (wafer fabrication equipment), is expected to experience significant growth due to a combination of a cyclical rebound in memory chips and growing demand for new AI-related chips. Lam’s product portfolio is particularly well positioned to benefit from both trends and should grow even faster than the overall market. Its shares now trade at ~30X prior peak earnings, which suggests this dynamic is well understood by the market and is mostly priced in.”
2. Nvidia Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 179
Jim Cramer in a latest program analyzed Nvidia Corp (NASDAQ:NVDA)’s charts and referred to the comments and analysis by Jessica Inskip of Stock Brokers.
According to Cramer, Inskip thinks if Nvidia Corp (NASDAQ:NVDA) could cross $140.76, it could reach a whopping $177.
“If it can break out above $140.76, how high can it go? We will use Fibonacci numbers. She thinks it can go—it’s almost embarrassing to say. She thinks it goes to $177. It would be by far the world’s largest company unless Apple could keep lockstep with it. I don’t even have the ability to show you where it is,” Cramer said.
Cramer also shared his take on this analysis:
“The charts interpreted by Jessica look pretty darn good for the S&P, NASDAQ, and NVIDIA. We have a bull market, but if it’s going to keep running, we need to see meaningful participation. That’s why she thinks NVIDIA is the most important in the market. If it can make a higher high, she thinks that’s the whole ballgame. As for me, I never bet against the fabulous Jensen Huang.”
Nvidia’s declines after the Q2 results were more or less expected amid Blackwell delay reports confirmed by management. However, the delays were mainly due to a change in Blackwell GPU mask. That does not affect the main functional logic or design of the chip, according to analysts. While Blackwell has been delayed for a few months, it does not change the core growth thesis for Nvidia.
Nvidia is set to see huge growth on the back of the data center boom amid the AI wave.
At Nvidia’s GPU Technology Conference in March 2024, CEO Jensen Huang estimated annual spending on data center infrastructure at about $250 billion. Over the next decade, this could total between $1 trillion and $2 trillion, depending on how long this level of investment continues. During the same Q&A session, Bank of America’s Vivek Arya echoed this estimate, suggesting the total addressable market would fall in the $1-2 trillion range, particularly as countries invest in their own AI infrastructure. By the end of the decade, spending could be at the high end of that range.
Of course, Nvidia won’t dominate the entire $2 trillion opportunity, as it faces competition from companies like AMD and internally developed AI accelerators from Google, Amazon, and even Apple. Some analysts believe Nvidia’s data center market share between 2025 to 2029 will be over $950 billion—less than half of the total market—but still enough to make it the leader in the sector.
Baron Opportunity Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“Given the stellar returns of their stocks over the last couple of years, particularly NVIDIA Corporation, and the weights they grew to in the portfolio, we trimmed NVIDIA and Microsoft Corporation during the period. As we articulated above, our views regarding AI and the leadership of these two companies have not changed. On an absolute basis, NVIDIA and Microsoft remain the top two positions in the portfolio – as of this writing NVIDIA is our largest position and Microsoft is second – and both remain material overweights versus the Benchmark.”
1. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 184
A frustrated Jim Cramer during a program on CNBC tore apart analyst notes discussing Apple Inc (NASDQ:AAPL)’s iPhone 16 performance based on sales trackers, saying we have to end this “game” of trackers.
“Jeffries, Loop Capital, and JPMorgan, they’re all playing this game—how good are Apple Inc (NASDQ:AAPL) sales, using trackers?”
Cramer was referring to different analyst notes trying to gauge how well iPhone 16 is doing based on different indicators and trackers for estimates.
“We have to end the tracker game. Let this be the official…No more tracks,” Cramer added.
Almost every bullish case on Apple Inc (NASDAQ:AAPL) was built around this assumption: millions of people would rush to upgrade their iPhone because of AI features. But the latest numbers for iPhone 16 do not show much enthusiasm for the new device.
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). Can Apple Intelligence break this trend? We’ll find out soon.
However, the assumption that we will see a huge upgrade cycle of iPhone just because of AI is big and comes with a lot of risks. Apple Inc (NASDAQ:AAPL) trades at a forward PE multiple of around 35x, well above its 5-year average of nearly 27x. Its expected EPS forward long-term growth rate of 10.39% does not justify its valuation, especially with the iPhone upgrade cycle assumption. Adjusting for this growth results in a forward PEG ratio of 3.33, significantly higher than its 5-year average of 2.38.
Wedgewood Partners stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) also contributed to performance as investors continued to favorably discount the recent unveiling of its AI strategy. As we have noted in the past, the Company has been at the forefront of proprietary semiconductor computer processor development for well over a decade. Given the compute-intensive nature of AI applications, Apple is well situated to develop a suite of compelling, consumer-friendly AI services that are also cost-effective. Apple’s AI value proposition should compel consumers to continue growing their engagement in the Apple ecosystem over the next several years.”
While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL), 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 AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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