Jim Cramer, host of Mad Money, recently shared his perspective on a few oil service stocks and the impact of President Donald Trump’s pro-drilling agenda. While Trump has rolled out extensive plans aimed at boosting the oil and gas industry, Cramer said that oil service stocks might not see immediate gains as a result.
“The whole oil and gas industry loves a ‘drill, baby, drill’ White House, but doesn’t automatically take up the oil service stocks, or the producers for that matter. After listening to what SLB and HAL had to say over the past week, considering the macro environment and the new geopolitical factors, I think their stocks can work over time, just perhaps not necessarily right now.”
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Cramer further elaborated that President Trump’s public statements often feel like a non-stop “lightning round” of buys and sells. Wall Street, he said, enjoys the energy and excitement that comes with Trump’s rapid-fire ideas, even if they don’t always lead to actionable investment opportunities.
“If you’re a trader, Trump’s a dream come true. He generates a huge number of catalysts every time he talks. I don’t think most people should trade too hard unless you do it professionally, but this is heaven on earth for them.”
Cramer also pointed to historical examples, specifically drawing a comparison to President Ronald Reagan’s time in office. He recalled that Reagan’s vision of a 600-ship Navy led to significant profits for defense contractors. However, Cramer noted an important difference between Reagan’s and Trump’s approach: while Reagan’s statements were more measured, Trump’s style is fast-paced and unpredictable. Cramer sees this rapid-fire communication as both a challenge and an opportunity for market participants.
“I think we have to expect that President Trump will say something every day that gets a ton of coverage… We need to monitor these statements, but, look, we can’t expect all of them to generate actionable investing ideas, even if they do produce bullish animal spirits that boost the market.”
Jim Cramer Looked At These 7 Stocks Recently
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 January 23. 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).
Jim Cramer Looked At These 7 Stocks Recently
7. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 11
SoundHound AI, Inc. (NASDAQ:SOUN) creates voice AI solutions that enable businesses to offer conversational experiences across multiple industries. Its products include tools for building custom voice assistants and improving customer service with real-time data integration. Calling the stock a meme stock, Cramer commented:
“Okay, this is a meme stock and they kinda get it going. I’m never gonna get in the way of a meme stock because you never know how high they can go.”
In early January, Cramer talked about SoundHound AI (NASDAQ:SOUN) and said:
“You got to ring the register on some of that. Here’s the problem with SoundHound: It’s just a chronic money loser and because of that, it actually, I think if I were them I’d sell about 50 million shares right here down in the hole and make it so you’d never worry about the cash position because they do have some interesting technology but at this point, it is a short squeeze and a short squeeze only. Until they do that stock and make it so their balance sheet’s better because they keep losing money.”
SoundHound AI (NASDAQ:SOUN) has faced significant challenges recently, with its stock declining over 37% since the start of January. In its third-quarter 2024 report, the company posted an operating loss of $33.8 million, more than double the $14.5 million loss it recorded in the same period the previous year. Over the nine months of 2024, the company used up $75.8 million in operational expenses.
6. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 25
As Cramer gushed over Enterprise Products Partners L.P. (NYSE:EPD), he noted the stock’s yield and it being cheap.
“Oh my God, it’s my absolute, absolute favorite of the group. I think you just gotta, just stand there and buy it. It’s cheap. It’s got a good yield and its business is fabulous. Thank you Rusty Braziel for pointing that one out to me a long time ago.”
Enterprise Products Partners (NYSE:EPD) offers midstream energy services, including the transportation, storage, and processing of natural gas, crude oil, NGLs, petrochemicals, and refined products. Over the past 5 years, the stock has gone up more than 28% and it has a yield of nearly 6%. Cramer has been a fan of EPD for quite some time. Back in September 2023, he shared his enthusiasm for the company, describing it as his favorite and emphasizing its yield. He also praised it as an incredible pipeline company, expressing that he thought it was terrific.
Then in November 2024, he was asked about Enterprise Products Partners (NYSE:EPD) again and he said, “I like this it just spiked, it just spiked but I do like EPD. I’ve liked it for a very long time I would double down right here.”
5. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 38
Talking about Halliburton Company (NYSE:HAL), Cramer said:
“So what about Halliburton, which reported yesterday morning? Alright, well, Hal’s stock is simply beaten down having fallen almost 25% last year. It didn’t get an SLB-style bounce yesterday. In fact, it lost another 3.6% and then today it got hit for another 1.8%. Why? Well, Halliburton had mixed headline numbers. Revenue was down 2% year-over-year, slightly lower than expected. Well, the earnings only beat estimates by a penny.
Halliburton is much more levered to North America than SLB and right now, that’s hurting them as North American revenue fell 7%. Even the international business was up 3%. But North America’s where the action is for these guys. Looking forward, Halliburton says it expects flat international revenues in 2025 with Halliburton CEO Jeff Miller saying, ‘growth in most international markets offset by activity reduction in Mexico.”
Cramer pointed out that Halliburton (NYSE:HAL) is seeing positive global prospects, except in Mexico. While North America has a promising long-term outlook, the company expects a decline of low to mid-single digits in 2025. Cramer emphasized that pricing pressures in the U.S. are making the situation worse, though Miller remains optimistic about the company’s future. Cramer remarked:
“Miller knows that after conceding and giving those price breaks I just mentioned, Halliburton’s now sold out with all of its fleets working under committed or contracted programs. Good. He also mentioned some new technologies including Zeus, the company’s new electric fracturing pumping unit. That’s a fracking tool. And this is the part that I like best, Miller explained, ‘I believe the next catalyzing inflection from North America services will be up, not down.
I believe the most pressing energy problem in North America today is the power shortage driven by the electrification and power demand for AI and this cannot be solved without significant amounts of natural gas.’ I totally agree with him. He goes on to say, this is on top of the expected increases in LNG exports. These are all very good things for Halliburton in 2025. Same story as SLB. I think it’s compelling even if it will take time to play out.”
Cramer noted that while oil service stocks like SLB and Halliburton (NYSE:HAL) may remain under pressure this year, they are currently trading at very low valuations, with SLB priced at 12 times earnings and a 2.7% yield, and Halliburton at 10 times earnings with a 2.4% yield. Though it’s hard to predict when these stocks will bottom out, Cramer suggested starting a small position now and adding more gradually, treating them as deep value plays that require patience.
4. Chord Energy Corporation (NASDAQ:CHRD)
Number of Hedge Fund Holders: 50
Chord Energy Corporation (NASDAQ:CHRD) is a U.S.-based independent exploration and production company. It focuses on acquiring, exploring, developing, and producing crude oil, natural gas, and natural gas liquids, primarily in the Williston Basin. In response to a viewer’s question about the company, Cramer clarified:
“Well, not an oil guy here. I mean, you know that in the club, we know we’re selling our Coterra now that it’s hit $30. We think it goes still higher, but we don’t want an add, Jeff Marks and I talked to the club, we’re not adding any more oils.”
During the announcement of its Q3 2024 results, Danny Brown, Chord Energy’s (NASDAQ:CHRD) President and Chief Executive Officer, shared a new three-year outlook for the company, highlighting a significant capital expenditure plan. According to the company’s projections, it plans to allocate $1.4 billion annually in capital expenditures for the years 2025 through 2027, aimed at maintaining flat pro-forma FY24 oil production levels of 152,000 to 153,000 barrels of oil per day.
Brown emphasized that this capital spending plan reflects improved capital efficiency, driven by the company’s high-quality inventory, better operational practices, and over $200 million in synergies resulting from its merger with Enerplus.
It should be noted that on January 22, Morgan Stanley increased its price target on Chord Energy (NASDAQ:CHRD) to $160 from $158 while maintaining an Equal Weight rating on the stock. The firm updated its price deck based on Q4 actual results and the latest forward strip, noting that its 2025 EBITDA projections for the North American exploration and production sector are rising by an average of 11%.
The firm continues to favor gas over oil and, within the oil sector, prefers Majors and exploration and production companies that show a positive rate of change, according to an analyst note ahead of Q4.
3. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 58
During the episode, Cramer expressed enthusiasm about Lam Research Corporation (NASDAQ:LRCX) and emphasized that the stock is cheap.
“That stock is so cheap. Oh, I wanna buy it. I wanna buy. We have so much semi in the Charitable Trust, but that stock is so, the cheapest I’ve seen in a long time. I really like LRCX.”
Lam Research (NASDAQ:LRCX) operates in the semiconductor sector and specializes in the design, manufacturing, marketing, refurbishment, and maintenance of equipment used in integrated circuit production. At the time of writing, the stock has a forward P/E of 21.60. In October 2024, Cramer pointed out that the company is not solely tied to ASML’s performance. He mentioned that the company has already disclosed its level of exposure to China and has made adjustments by reducing it. Given these factors, Cramer expressed that he would consider buying the stock.
Vltava Fund, an investment management company, noted in its Q4 2024 investor letter that Lam Research (NASDAQ:LRCX) is a market leader in plasma etching, thin film deposition platforms, photoresist systems, as well as wet and plasma-based cleaning products for individual wafers. The fund mentioned the company’s ROCE, capital allocation, and more as it said:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials and Lam Research Corporation (NASDAQ:LRCX). Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Dozens of companies are directly or indirectly involved in the production of semiconductors. Within this broad group of companies, there are several without which it would not be possible to produce advanced types of semiconductors in the world today. These include a group of five very well-known companies, each of which has a dominant global position in its particular field, and which together operate more or less as oligopolies. These are Lam Research, Applied Materials, KLA Corporation, ASML, and Tokyo Electron. At the end of the year, we benefited from a significant correction in the share prices of Applied Materials and Lam Research, and, together with KLA Corporation, we now own three of them. We view these as one collective investment into a critical point within a very important segment of the global economy that is growing and will continue to grow over the long term.
Lam Research manufactures wafer fabrication equipment for the semiconductor industry and also provides related services. The company is a market leader in plasma etching, thin film deposition platforms, photoresist systems, as well as wet and plasma-based cleaning products for individual wafers. Its main customers are the four major semiconductor manufacturers Micron, Samsung, SK Hynix, and Taiwan Semiconductors. Lam Research is a business with net margins of around 27% and ROCE of about 30%. Capital outlays are relatively small. The company has good capital allocation with a preponderance of share buybacks…” (Click here to read the full text)
2. Schlumberger Limited (NYSE:SLB)
Number of Hedge Fund Holders: 65
Comparing Schlumberger Limited (NYSE:SLB), the oil giant, and Halliburton, Cramer called SLB “the larger and more international of the two” and delved into SLB’s recently released earnings results.
Cramer noted that the stock rose in response to its strong fourth-quarter performance, highlighting better-than-expected results, particularly in North America. While the international segment met expectations, Latin America showed some weakness. Cramer pointed out that the vital takeaway was management’s cautious but not overly negative outlook for the future. He added:
“One analyst from JPMorgan called it better than feared and that sounds about right, at least to me. CEO Olivier Le Peuch, he noted that in the back half of 2024, his customers, meaning the oil and gas producers, ‘adopted a more cautious approach, primarily driven by concerns of an oversupplied oil market’. But then he added, ‘Although these concerns persist, we anticipate the oil supply imbalance will gradually abate’, citing global economic growth and a heightened focus of energy security coupled with rising energy demand from AI and data centers.
Yes! For this year specifically, Le Peuch said, ‘We expect global upstream investment to be steady in 2025 compared to 2024.’ For the smaller North American side of the business, he sounded less optimistic explaining that oil and gas activity is expected to decline due to lower publicly announced CapEx in U.S. land, higher drilling efficiency, and a slow recovery in gas until LNG capacity expansions are resolved. Now the stock’s still got a nice pop on these numbers and that commentary, gained 6% last Friday because the results were better than feared.”
Cramer pointed out that Schlumberger’s (NYSE:SLB) stock had dropped by 26% in 2024, and he viewed the most recent quarter as relatively neutral, particularly when it came to the North American business. While Cramer acknowledged that the company’s performance was not bad, he also felt it did not provide much in the way of optimism.
He noted that SLB had already given back most of the gains from last Friday’s rally, which he believed was reasonable given that the quarter was not awful, but it also did not offer much to get excited about. Cramer went on to say:
“Plus, while I think the oil service plays could remain challenged for a while, maybe the entire year, these stocks right now are incredibly cheap. SLB, 12 times this year’s earnings, 2.7% yield. Halliburton 10 times with a 2.4% yield. That said, it’s hard to predict when these stocks are going to bottom. Given how cheap they are though, I could count on starting a small position now as long as you prepare to go slowly, buy more on the way down, and accept that these are value plays, deep value.”
1. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity firm known for its sophisticated Falcon platform, which provides a variety of endpoint security solutions. When a caller asked Cramer about the company, he said, “… that one’s going higher. We’re going to have the anniversary of the July outage, don’t forget, and then it’s gonna fly.”
In 2024, the company faced a significant setback last summer when a botched update caused a global outage affecting Windows computers and servers. As a result of the incident, the stock experienced a sharp decline. However, according to PYMNTS, CrowdStrike (NASDAQ:CRWD) CEO, George Kurtz, recently commented that the company successfully turned a challenging situation into an opportunity. PYMNTS noted that the company has fully recovered from that loss and has seen its stock now surpass its value prior to the outage, as reported by the Financial Times. From July 19, 2024, the stock has gained over 20%.
Kurtz explained that CrowdStrike (NASDAQ:CRWD) managed to transform this crisis into a competitive advantage, maintaining customer trust throughout the process. He shared that customers have continued their relationships with the company, with one client even expressing that “broken bones heal stronger” and they didn’t expect such an issue to occur again. Kurtz contrasted this with competitors, who haven’t faced a similar crisis and might pose a higher risk to customers.
While we acknowledge the potential of CrowdStrike Holdings, Inc. (NASDAQ:CRWD) 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 CRWD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
